CALGARY, AB, Aug. 5, 2021 /CNW/ - Tidewater Midstream and Infrastructure Ltd. ("Tidewater Midstream" or the "Corporation") (TSX: TWM) is pleased to announce that it has filed its condensed interim consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the three and six month periods ended June 30, 2021.

Tidewater Midstream and Infrastructure Ltd. Logo (CNW Group/Tidewater Midstream and Infrastructure Ltd.)

SECOND-QUARTER 2021 FINANCIAL PERFORMANCE

Highlights

  • Tidewater Midstream delivered another record quarter of Adjusted EBITDA growth. This performance continues to highlight the resiliency and stability of the Corporation's integrated business model and the Corporation continues to grow in the energy sector with the creation of Tidewater Renewables Ltd., as described below. Adjusted EBITDA increased to $52.3 million in the second quarter of 2021 as compared to $41.9 million in the second quarter of 2020, resulting in 25% Adjusted EBITDA growth year over year. Net income attributable to shareholders was $64.3 million for the second quarter of 2021 as compared to a net income of $1.1 million in the second quarter of 2020. This increase is the result of both realized and unrealized gains on derivative contracts related to the Corporation's feedstock for its downstream operations, secured at a lower cost, as well as the Corporation's realized gain on the sale of assets from its Pioneer Pipeline disposition.
  • Net cash provided by operating activities totaled $42.3 million for the second quarter of 2021, with distributable cash flow of $17.3 million and a payout ratio of 20%.
  • On July 21, 2021, the Corporation announced the formal creation of Tidewater Renewables Ltd. ("Tidewater Renewables") as a wholly owned subsidiary of the Corporation. Tidewater Renewables was formed to become a multi-faceted, energy transition company focusing on the production of low carbon fuels. The creation of and the initial public offering of Tidewater Renewables is a result of a thorough evaluation of financing alternatives with the goal of funding Tidewater Renewables' portfolio of clean fuel projects while allowing the Corporation to continue to deleverage through 2021.
    An amended and restated preliminary prospectus qualifying the initial public offering of Tidewater Renewables' common shares to the public (the "Offering") was filed on July 26, 2021. In connection with the Offering, Tidewater Renewables will ‎acquire certain pre-existing operating assets as well as a number of growth projects from the Corporation that will provide an initial platform ‎for the renewable diesel, renewable hydrogen, and renewable natural gas business units (the "Acquired Assets"). Tidewater Renewables expects the Acquired Assets to generate approximately $40 million of run-rate EBITDA primarily from take-or-pay contracts with the Corporation, as the primary counterparty, and from other non-take-or-pay activities. This will provide Tidewater Renewables with stable, long-term, contracted cash flows. The creation of Tidewater Renewables provides the Corporation with a focused vehicle for pursuing and funding growth opportunities in the renewable energy sector. Upon completion of the Offering, the Corporation would retain a majority equity stake in Tidewater Renewables (equity stake to be determined by ultimate price and size of the Offering).
    The Offering is expected to close and begin trading as a separate entity on the TSX in August 2021, and is subject to, and conditional upon, the receipt of all necessary approvals, including regulatory approvals.
  • On June 30, 2021, the Corporation, together with its partner, TransAlta Corporation ("TransAlta"), successfully closed the sale of the Pioneer Pipeline (the "Pioneer Transaction") to ATCO Gas and Pipelines Ltd. ("ATCO") for gross proceeds of $255 million. Tidewater received net cash proceeds of approximately $135 million which included the sale of certain ancillary assets to TransAlta that closed concurrently with the Pioneer Transaction. The Pioneer Pipeline will be integrated into the Nova Gas Transmission Ltd. ("NGTL") and ATCO Alberta integrated natural gas transmission systems to provide reliable natural gas supply to TransAlta's power generating units at Sundance and Keephills. Tidewater Midstream used the proceeds from this disposition to accelerate its deleveraging plan.
  • Tidewater Midstream anticipates after the closing of the expected Offering of Tidewater Renewables, it will achieve its consolidated leverage target of 3.0x to 3.5x net debt to annualized Adjusted EBITDA. Tidewater Midstream remains focused on high rate of return capital projects to support continued growth. The Corporation is currently evaluating multiple projects in the $5 million to $25 million capital cost range with payouts of under 3 years and remains committed to its leverage target of 3.0x to 3.5x net debt to annualized Adjusted EBITDA.
  • Tidewater Midstream remains optimistic in its outlook for global energy demand as commodity prices strengthen. Within Western Canada, Tidewater Midstream continues to see strong demand at PGR as a result of large infrastructure projects in central and northern British Columbia. Throughput at PGR remains strong at over 11,400 bbls/day, with combined gasoline and diesel production over 10,000 bbls/day. The PGR crack spread, a measure of refining margins, remains strong going into the third quarter at approximately $60/bbl. The Pipestone Gas Plant had its strongest quarterly run times and cash flow generation to date during the second quarter of 2021.
  • The Corporation is committed to its Environmental, Social and Governance ("ESG") performance. The Corporation continues to advance its inaugural sustainability report, which is scheduled to be published in the first quarter of 2022. Additional information relating to ESG metrics and corporate policies is available at www.tidewatermidstream.com/esg/.

Selected financial and operating information is outlined below and should be read with Tidewater's condensed interim consolidated financial statements and related MD&A as at and for the three and six month periods ended June 30, 2021 which are available at www.sedar.com and on our website at www.tidewatermidstream.com.

Financial Overview

Consolidated Financial Highlights

(in thousands of Canadian dollars
except per share information)


Three months ended
June 30,

Six months ended
June 30,


2021


2020


2021


2020

Revenue

$

369,781

$

178,568

$

729,820

$

431,032

Net income (loss) attributable to
shareholders (1)

$

64,280

$

1,114

$

72,676

$

(37,026)

Basic net income (loss) attributable to
shareholders per share (1)

$

0.19

$

0.00

$

0.21

$

(0.11)

Diluted net income (loss) attributable to
shareholders per share (1)

$

0.16

$

0.00


0.18

$

(0.11)

Adjusted EBITDA (2)

$

52,294

$

41,873

$

103,407

$

83,379

Net cash provided by operating activities

$

42,325

$

58,985

$

97,857

$

86,975

Distributable cash flow (3)

$

17,272

$

10,559

$

34,189

$

23,048

Distributable cash flow per common share
– basic (3)

$

0.05

$

0.03

$

0.10

$

0.07

Distributable cash flow per common share
– diluted (3)

$

0.04

$

0.03

$

0.08

$

0.07

Dividends declared

$

3,393

$

3,384

$

6,785

$

6,761

Dividends declared per common share

$

0.01

$

0.01

$

0.02

$

0.02

Total common shares outstanding (000s)


339,299


338,413


339,299


338,413

Payout ratio (4)


20%


32%


20%


29%

Total assets (1)

$

1,948,381

$

1,840,138

$

1,948,381

$

1,840,138

Net debt (5)

$

742,969

$

862,493

$

742,969

$

862,493












Notes:




1

Amounts for the three and six months ended June 30, 2020 have been restated. Refer to the "Voluntary Change in Accounting Policy" in Tidewater's MD&A and Note 2(b) to the condensed interim consolidated financial statements for the three and six months ended June 30, 2021.

2

Adjusted EBITDA is calculated as net income before interest, taxes, depreciation, share-based compensation, unrealized gains/losses, non-cash items, transaction costs, items that are considered non-recurring in nature and the Corporation's proportionate share of EBITDA in their equity investments. Adjusted EBITDA is not a standard measure under GAAP. See "Non-GAAP Measures" in the Corporation's MD&A for a reconciliation of Adjusted EBITDA to its most closely related GAAP measure.

3

Distributable cash flow is calculated as net cash used in operating activities before changes in non-cash working capital and after any expenditures that use cash from operations. Distributable cash flow per common share is calculated as distributable cash flow over the weighted average number of common shares outstanding for the three and six month periods ended June 30, 2021. Distributable cash flow and distributable cash flow per common share are not standard measures under GAAP. See "Non-GAAP Measures" in the Corporation's MD&A for a reconciliation of distributable cash flow and distributable cash flow per common share to their most closely related GAAP measures.

4

Payout Ratio is calculated by expressing dividends declared to shareholders for the period as a percentage of distributable cash flow attributable to shareholders. This measure, in combination with other measures, is used by the investment community to assess the sustainability of the current dividends. Payout Ratio is not a standard measure under GAAP. See "Non-GAAP Financial Measures" in the Corporation's MD&A for a reconciliation of Payout Ratio to its most closely related GAAP measure.

5

Net debt is defined as bank debt, convertible debentures and notes payable, less cash. Net Debt is not a standard measure under GAAP. See "Non-GAAP Measures" in the Corporation's MD&A for a reconciliation of Net Debt to its most closely related GAAP measure.

OUTLOOK AND CORPORATE UPDATE

Tidewater Midstream is pleased to deliver a record quarter of EBITDA generation in the second quarter of 2021 as the PGR and Pipestone Gas Plant continue to run at high utilization rates. Continued consolidation and new investment in the energy sector, as well as a material recovery in commodity prices, have had an overall positive impact on producer balance sheets and Tidewater Midstream continues to work with its customers on ways to improve margins and related service offerings. Tidewater Midstream remains positive about the outlook for commodity prices in the second half of 2021. There is increased investor interest in the energy transition and renewable sectors, where Tidewater Midstream is uniquely positioned to play a key role in the continued development of renewable fuels, carbon capture, renewable natural gas, and renewable hydrogen through its creation of Tidewater Renewables.

Prince George Refinery

PGR is a 12,000 bbl/day light oil refinery that predominantly produces low sulphur diesel and gasoline to supply the greater Prince George region. PGR has significant onsite storage capacity of greater than 1.0 MMbbl and flexible logistics, with pipeline, rail and truck connectivity in place. The Prince George region is generally in short supply of refined products, and the refinery's location within the region makes it a critical piece of infrastructure with a significant logistical advantage to address demand in northern British Columbia.

PGR has significant advantages given its location as the Prince George market faces logistical and economic challenges given transport costs and the lack of offloading facilities in the area. Additionally, the refinery supplies the majority of the regional demand, which is comprised of major local industries such as forestry, mining and oil and gas.

During the second quarter of 2021, total throughput was approximately 95% of the refinery's nameplate capacity at approximately 11,460 bbl/day. As a result of planned annual maintenance, second quarter throughput was down approximately 5% from the first quarter of 2021. Throughput during the second quarter of 2021 was approximately 8% higher compared to the same quarter of 2020.

Tidewater Midstream's daily throughput and refined product yields at PGR were as follows:


Q2 2021

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Daily throughput (bbl)

11,459

12,095

12,187

12,180

10,569

11,576

Refinery Yield (1)







Gasoline yield

45%

39%

39%

44%

42%

42%

Diesel yield

43%

49%

49%

43%

43%

46%

Other (2)

12%

12%

12%

13%

15%

12%





(1)  Refinery yield includes crude and intermediates.

(2) Other refers to heavy fuel oil (HFO), LPG and feedstock consumed to fuel the refinery. 

Tidewater Midstream's refining margins are largely driven by commodity prices, particularly the cost of crude feedstock and other raw materials, along with market prices for refined products. Crack spreads remained strong averaging approximately $60/bbl during the quarter, consistent with the first quarter of 2021. The Corporation realized lower diesel demand during the second quarter, as compared to the first quarter of 2021, as a result of spring break up. Additionally, the Western Pipeline, which transports a portion of the refinery's feedstock, underwent unplanned maintenance during May and June. This was mitigated through trucking feedstock into the refinery, increasing operating expenses during the second quarter. Despite the lower diesel demand during the second quarter, the strong Prince George crack spread continues to demonstrate the strength of the regional refining market. Increased feedstock prices at PGR were also partially offset by realized gains on derivative contracts.

Tidewater Midstream continues to progress its canola co-processing project, with commissioning expected in the third quarter of 2021. The project is supported by the BC provincial government and will produce both renewable gasoline and renewable diesel, which generate BC low carbon fuel standard ("LCFS") credits. Tidewater Midstream continues to pursue numerous low capital and high rate of return debottleneck and optimization opportunities within its downstream business unit. Tidewater Renewables continues to evaluate various renewable initiatives at PGR.

Pipestone Gas Plant

The Pipestone Gas Plant is designed to process 100 MMcf/day of sour natural gas. This asset includes two acid gas injection wells, a saltwater disposal well, and sales gas pipelines directly connected to the Pipestone Gas Storage Facility, as well as the Alliance and NGTL pipeline systems. The facility is also pipeline connected to Pembina's liquid gathering systems for the C2+ and C5+ liquid streams.

The Pipestone Gas Plant processed an average volume of 92 MMcf/day in the second quarter of 2021, a 19% increase from Q2 2020 and an increase of 11% from Q1 2021. Facility availability for the quarter averaged 94%, an increase of 9% from Q1 2021. During the month of May, the Pipestone Gas Plant achieved a significant milestone by averaging a daily throughput of 100 MMcf/d combined with 100% facility availability. The Montney area continues to remain very active, and the plant remains fully contracted with over 85% committed capacity on take-or-pay arrangements.

Brazeau River Complex and Fractionation Facility

The BRC is a core asset for Tidewater Midstream, offering a full suite of services to producers, including C2, C3, C4 and C5 pipeline connections, NGL fractionation capacity, sweet and sour deep-cut gas processing capability, truck loading and offloading facilities, natural gas storage facilities and two natural gas egress solutions including the NGTL system and gas storage. 

The Brazeau River fractionation facility performed well during the second quarter of 2021, despite a 400 bbl/day reduction in throughput due to third-party turnarounds and maintenance activities. Decreased volumes were offset with strong NGL netbacks improving the frac spread margins realized at the Corporation's extraction facilities. During the second quarter of 2021, new agreements were signed with several investment grade counterparties for NGL service at Brazeau. 

Concurrent with the close of the Pioneer Transaction, Tidewater Midstream's natural gas liquids extraction service ("OS-Ext") came into effect with NGTL at the Rat Creek West Meter Station. This service will allow Tidewater Midstream to extract higher value liquids from the natural gas stream prior to delivery of natural gas to the TransAlta facilities. No major facility modifications or capital expenditures were required to implement this service. Tidewater Midstream anticipates increased throughput at its Brazeau River Complex based on the improved economics provided by the OS-Ext service and forecasted frac spreads.

Throughput at the BRC gas processing facility for the second quarter of 2021 was consistent with the previous quarter. Strong AECO gas prices in the past six months have increased producer activity near the BRC. Tidewater Midstream continues to look for opportunities to increase third-party plant throughput by working diligently with producers to improve netbacks by utilizing the BRC's facilities.

Natural Gas Storage

Tidewater Midstream operates three natural gas storage reservoirs: Dimsdale Paddy A (Pipestone Gas Storage Facility), Brazeau Nisku F, and Brazeau Nisku A. The Pipestone Gas Storage Facility and Brazeau Nisku A are owned through joint ventures with a private Canadian entity and are accounted for as equity investments.

All three storage facilities continued to withdraw in the second quarter as it progressed through what is typically a summer injection season. The Pipestone Gas Storage Facility continues to deliver high withdrawal rates, averaging 40,000 GJ/day over the quarter, with deliverability rates gradually decreasing as the facility is depressurized.       

Similarly, both Brazeau Nisku A and Brazeau Nisku F storage pools continued to withdraw through the period, helping meet Pioneer Pipeline's demand and realizing both storage and liquids extraction value.

Consistent with the rest of the continent, the Alberta natural gas market saw steadily increasing cash prices throughout the quarter (ranging from $2.41 CAD/GJ to $4.16 CAD/GJ and averaging $2.93 CAD/GJ) with significant upwards volatility in late June corresponding with a North American heat wave. Operationally, all storage facilities performed well through the heat wave period and successfully met all delivery obligations. 

The Pipestone Gas Storage Facility is largely contracted with take-or-pay contracts spanning through 2027 with multiple investment grade counterparties. The facility represents a significant contribution to Tidewater Midstream's fee-for-service gas storage business and offers producers at the Pipestone Gas Plant significant optionality where the plant has three egress solutions, including connections to the TC Energy and Alliance systems and gas storage.

CAPITAL PROGRAM

Tidewater Midstream's 2021 capital program focuses on small-scale optimization projects along with its renewable initiatives. Tidewater Midstream continues to evaluate and execute smaller capital projects in the $5 million to $25 million capital cost range with strong short-term returns on investment. Tidewater Renewables' 300 bbl/day canola co-processing project at PGR is expected to be commissioned in the third quarter of 2021.

The Corporation, through Tidewater Renewables, has begun engineering and construction on its renewable diesel and renewable hydrogen complex. Final investment decision is expected in the third quarter of 2021, with commissioning expected in the first quarter of 2023.

SECOND QUARTER 2021 EARNINGS CALL  

In conjunction with the earnings release, investors will have the opportunity to listen to Tidewater Midstream's senior management review its second quarter 2021 results via conference call on Thursday, August 5, 2021 at 11:00 am MDT (1:00 pm EDT).

To access the conference call by telephone, dial 416-764-8659 (local / international participant dial in) or 1-888-664-6392 (North American toll free participant dial in). A question and answer session for analysts will follow management's presentation.

A live audio webcast of the conference call will be available by following this link: https://produceredition.webcasts.com/starthere.jsp?ei=1483576&tp_key=582a26480a and will also be archived there for 90 days.

For those accessing the call via Cision's investor website, we suggest logging in at least 15 minutes prior to the start of the live event. For those dialing in, participants should ask to be joined into the Tidewater Midstream and Infrastructure Ltd. earnings call.

ABOUT TIDEWATER

Tidewater Midstream is traded on the TSX under the symbol "TWM". Tidewater Midstream's business objective is to build a diversified midstream and infrastructure company in the North American natural gas, natural gas liquids, crude oil, refined product and renewable space. Its strategy is to profitably grow and create shareholder value through the acquisition and development of oil and gas infrastructure. Tidewater Midstream plans to achieve its business objective by providing customers with a full service, vertically integrated value chain, including gas plants, pipelines, railcars, trucks, export terminals, storage, downstream facilities and various renewable initiatives.

Additional information relating to Tidewater Midstream is available on SEDAR at www.sedar.com and at www.tidewatermidstream.com. 

Advisory Regarding Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements and forward-looking information (collectively referred to herein as, "forward-looking statements") within the meaning of applicable Canadian securities laws. Such forward-looking statements relate to future events, conditions or future financial performance of Tidewater Midstream based on future economic conditions and courses of action. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements are often, but not always, identified by the use of any words such as "seek", "anticipate", "budget", "plan", "continue", "forecast", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "will likely result", "are expected to", "will continue", "is anticipated", "believes", "estimated", "intends", "plans", "projection", "outlook" and similar expressions. These statements involve known and unknown risks, assumptions, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon.

In particular, this press release contains forward-looking statements pertaining to but not limited to the following:

  • the Corporation's renewable initiatives, including plans related to same, timing and financing;
  • targeted Net Debt to Adjusted EBITDA of 3.0x to 3.5x with the closing of the expected Offering;
  • expected financial benefits accruing to Tidewater Midstream as a result of the successful execution of the Offering;
  • continued volatility of financial markets and commodity prices;
  • guidance with respect to forecasted Adjusted EBITDA;
  • continued consistent performance of the Corporation's facilities;
  • the pace of reintegration of the Corporation's workforce to its business offices;
  • forecasted payout ratio and the projected use of Distributable Cash Flow to reduce leverage;
  • projections with respect to net debt to Adjusted EBITDA subsequent to the completion of the Pioneer Transaction;
  • the Corporation's ability to benefit from the combination of growth opportunities and the ability to grow through capital projects;
  • the long-term impact of COVID-19 on the Corporation's business, financial position, results of ‎operations and/or cash flows;‎
  • supply and demand for services;
  • budgets, including future capital, operating or other expenditures and projected costs;
  • estimated throughputs;
  • the Corporation's continuing evaluation of opportunities to develop future low-carbon fuel and renewable energy projects at the PGR and expansion and optimization opportunities at the PGR;
  • receipt of all regulatory approvals for, and closing of, the Offering and completion of the transaction between the Corporation and Tidewater Renewables to transfer the Acquired Assets;
  • expectations regarding Tidewater Renewable's operations and financial results from operations, including run rate EBITDA expectations and take-or-pay arrangements;
  • timing, impact and capital requirements of the Canola co-processing project at PGR;
  • the successful integration of acquisitions and projects into the Corporation's existing business;
  • anticipated integration of the Pioneer Pipeline into NGTL's and ATCO's Alberta integrated natural gas transmission systems;
  • impact of planned annual maintenance on PGR;
  • expectations relating to the natural gas liquids extraction service with NGTL at the Rat Creek West Meter Station;
  • projections with respect to the returns on proposed small capital projects;
  • the Corporation's focus on generating cash flow, increasing liquidity and reducing leverage;
  • forecasts with respect to future environmental and climate change compliance obligation costs, and success of same;
  • Tidewater Midstream's expectations to pay dividends from distributable cash flow;
  • timing of, and expectations relating to, the Corporation's inaugural sustainability report; and
  • expectations that net cash provided by operating activities, cash flow generated from growth projects and cash available from Tidewater Midstream's Senior Credit Facility and other sources of financing will be sufficient to meet its obligations and financial commitments and will provide sufficient funding for anticipated capital expenditures.

Although the forward-looking statements contained in this MD&A are based upon assumptions which management of the Corporation believes to be reasonable, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this MD&A, the Corporation has assumptions regarding, but not limited to:

  • Tidewater Midstream's ability to execute on its business plan;
  • the timely receipt of all governmental and regulatory approvals sought by the Corporation including with respect to the Offering and related matters;
  • general economic and industry trends, including the duration and effect of the COVID-19 pandemic;
  • that any third-party projects relating to the Corporation's divestitures will be sanctioned and completed as expected;
  • future natural gas, crude oil and NGL prices;
  • continuing government support for existing policy initiatives;
  • processing and marketing margins;
  • future capital expenditures to be made by the Corporation;
  • foreign currency, exchange and interest rates;
  • that there are no unforeseen events preventing the performance of contracts;
  • the amount of future liabilities relating to lawsuits and environmental incidents and the availability of coverage under the Corporation's insurance policies;
  • that there are no unforeseen material changes related to the Corporation's planned divestitures and that counterparties will comply with contracts in a timely manner;
  • Cenovus volume demands from the PGR are consistent with forecasts;
  • that formal agreements with counterparties will be executed in circumstances where letters of intent or similar agreements have been executed and announced by Tidewater Midstream and that such transactions will close as expected;
  • the amount of future liabilities relating to lawsuits and environmental incidents;
  • oil and gas industry expectation and development activity levels and the geographic region of such activity;
  • the Corporation's ability to obtain and retain qualified staff and equipment in a timely and cost-effective manner;
  • assumptions regarding the amount of operating costs to be incurred;
  • that there are no unforeseen material costs relating to the facilities which are not recoverable from customers;
  • distributable cash flow and net cash provided by operating activities are consistent with expectations;
  • the ability to obtain additional financing on satisfactory terms;
  • the ability to successfully receive regulatory approval for the Offering and related matters;
  • the success and uptake of the Offering;
  • the availability of capital to fund future capital requirements relating to existing assets and projects;
  • the ability of Tidewater Midstream to successfully market its products; and
  • the Corporation's future debt levels and the ability of the Corporation to repay its debt when due.

The Corporation's actual results could differ materially from those anticipated in the forward-looking statements, as a result of numerous known and unknown risks and uncertainties and other factors including but not limited to:

  • changes in demand for refined products;
  • general economic, political, market and business conditions, including fluctuations in interest rates, foreign exchange rates, stock market volatility and supply/demand trends;
  • activities of producers and customers and overall industry activity levels;
  • failure to negotiate and conclude any required commercial agreements;
  • non-performance of agreements in accordance with their terms;
  • failure to execute formal agreements with counterparties in circumstances where letters of intent or similar agreements have been executed and announced by Tidewater Midstream;
  • failure to close transactions as contemplated and in accordance with negotiated terms;
  • risks of health epidemics, pandemics, public health emergencies, quarantines, and similar outbreaks, including COVID-19, which may have sustained material adverse effects on the Corporation's business financial position results of operations and/or cash flows;
  • the regulatory environment and decisions, and First Nations and landowner consultation requirements;
  • climate change initiatives or policies or increased environmental regulation;
  • that receipt of third party, regulatory, environmental and governmental approvals and consents relating to Tidewater Midstream's capital projects can be obtained on the necessary terms and in a timely manner;
  • that the resolution of any particular legal proceedings could have an adverse effect on the Corporation's operating results or financial performance;
  • competition for, among other things, business capital, acquisition opportunities, requests for proposals, materials, equipment, labour, and skilled personnel;
  • the ability to secure land and water, including obtaining and maintaining land access rights;
  • operational matters, including potential hazards inherent in the Corporation's operations and the effectiveness of health, safety, environmental and integrity programs;
  • actions by governmental authorities, including changes in government regulation, tariffs and taxation;
  • changes in operating and capital costs, including fluctuations in input costs;
  • legal risks and environmental risks and hazards, including risks inherent in the transportation of NGLs and refining of light crude oils which may create liabilities to the Corporation in excess of the Corporation's insurance coverage, if any;
  • actions by joint venture partners or other partners which hold interests in certain of the Corporation's assets;
  • reliance on key relationships and agreements;
  • construction and engineering variables associated with capital projects, including the availability of contractors, engineering and construction services, accuracy of estimates and schedules, and the performance of contractors;
  • the availability of capital on acceptable terms;
  • changes in the credit-worthiness of counterparties;
  • adverse claims made in respect of the Corporation's properties or assets;
  • risks and liabilities associated with the transportation of dangerous goods;
  • risks and liabilities resulting from derailments;
  • effects of weather conditions;
  • reliance on key personnel;
  • technology and security risks, including cybersecurity;
  • potential losses which would stem from any disruptions in production, including work stoppages or other labour difficulties, or disruptions in the transportation network on which the Corporation is reliant;
  • technical and processing problems, including the availability of equipment and access to properties;
  • changes in gas composition; and
  • failure to realize the anticipated benefits of recently completed acquisitions.

The foregoing lists are not exhaustive. Additional information on these and other factors which could affect the Corporation's operations or financial results are included in the Corporation's most recent AIF and in other documents on file with the Canadian Securities regulatory authorities.

Management of the Corporation has included the above summary of assumptions and risks related to forward-looking statements provided in this MD&A in order to provide holders of common shares in the capital of the Corporation with a more complete perspective on the Corporation's current and future operations, and such information may not be appropriate for other purposes. The Corporation's actual results' performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive therefrom. Readers are therefore cautioned that the foregoing list of important factors is not exhaustive, and they should not unduly rely on the forward-looking statements included in this MD&A. Tidewater Midstream does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities law. All forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. Further information about factors affecting forward-looking statements and management's assumptions and analysis thereof is available in filings made by the Corporation with Canadian provincial securities commissions available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.

Non-GAAP Measures

This press release refers to "Adjusted EBITDA" which does not have any standardized meaning prescribed by generally accepted accounting principles in Canada ("GAAP").  Adjusted EBITDA is calculated as income or loss before interest, taxes, depreciation, share-based compensation, unrealized gains/losses, non-cash items, transaction costs, items that are considered non-recurring in nature and the Corporation's proportionate share of EBITDA in their equity investments.

Tidewater's management believes that Adjusted EBITDA provides useful information to investors as it provides an indication of results generated from the Corporation's operating activities prior to financing, taxation and non-recurring/non-cash impairment charges occurring outside the normal course of business. Adjusted EBITDA is used by management to set objectives, make operating and capital investment decisions, monitor debt covenants and assess performance. In addition to its use by management, Tidewater also believes Adjusted EBITDA is a measure widely used by security analysts, investors and others to evaluate the financial performance of the Corporation and other companies in the midstream industry.  Investors should be cautioned that Adjusted EBITDA should not be construed as alternatives to earnings, cash flow from operating activities or other measures of financial results determined in accordance with GAAP as an indicator of the Corporation's performance and may not be comparable to companies with similar calculations.

"Distributable cash flow" is a non-GAAP financial measure and is calculated as net cash used in operating activities before changes in non-cash working capital plus cash distributions from investments, transaction costs, non-recurring expenses and after any expenditures that use cash from operations. Changes in non-cash working capital are excluded from the determination of distributable cash flow because they are primarily the result of seasonal fluctuations or other temporary changes and are generally funded with short term debt or cash flows from operating activities. Deducted from distributable cash flow are maintenance capital expenditures, including turnarounds as they are ongoing recurring expenditures. Transaction costs are added back as they vary significantly quarter to quarter based on the Corporation's acquisition and disposition activity. It also excludes non-recurring transactions that do not reflect Tidewater's ongoing operations.

Management of the Corporation believes distributable cash flow is a useful metric for investors when assessing the amount of cash flow generated from normal operations and to evaluate the adequacy of internally generated cash flow to fund dividends.

For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the "Non-GAAP Measures" section of Tidewater's most recent MD&A which is available on SEDAR.

SOURCE Tidewater Midstream and Infrastructure Ltd.

Copyright 2021 Canada NewsWire

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