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Tidewater Midstream and Infrastructure Ltd. Announces Third Quarter 2021 Results and Operational Update

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CALGARY, AB, Nov. 4, 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 nine month periods ended September 30, 2021.

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

THIRD-QUARTER 2021 FINANCIAL PERFORMANCE

Highlights

  • Tidewater Midstream delivered its tenth consecutive quarter of consolidated Adjusted EBITDA growth. This performance continues to highlight the resiliency and stability of the Corporation's integrated business model as the Corporation continues to grow in the renewable energy sector with the creation of Tidewater Renewables Ltd. ("Tidewater Renewables").

  • Consolidated Adjusted EBITDA increased to $53.1 million in the third quarter of 2021 as compared to $47.6 million in the third quarter of 2020, resulting in 11% consolidated Adjusted EBITDA growth year over year. Net income attributable to shareholders was $1.8 million for the third quarter of 2021 as compared to a net loss of $3.8 million in the third quarter of 2020. This increase includes the impact of both realized and unrealized gains on derivative contracts related to the Corporation's feedstock for its downstream operations, secured at a lower cost.

  • Net cash used in operating activities totaled $3.8 million for the third quarter of 2021, with distributable cash flow attributable to shareholders of $15.8 million and a payout ratio of 21%.

  • On August 18, 2021, Tidewater Renewables closed its initial public offering (the "Offering") of an aggregate of 10,000,000 common shares (the "TWR Common Shares") at a price of $15.00 per Common Share, for gross proceeds of $150 million, with an additional 735,000 TWR Common Shares issued on September 15, 2021 pursuant to the partial exercise of over-allotment option, for additional gross proceeds of approximately $11 million , with total gross proceeds of approximately $161 million raised by the Offering. In total, Tidewater Renewables received approximately $150 million in cash consideration net of underwriter commissions and legal expenses. The TWR Common Shares held by Tidewater Midstream represents approximately 69% of the outstanding common shares, with Tidewater Midstream retaining a majority equity stake in Tidewater Renewables. After the closing of the Offering, and as a result of certain transactions completed in connection with the Offering, the Corporation achieved its leverage target of 3.0x to 3.5x consolidated net debt to annualized consolidated Adjusted EBITDA.

  • Tidewater Midstream remains focused on pursuing and developing 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 consolidated net debt to annualized consolidated Adjusted EBITDA.

  • Tidewater Midstream remains optimistic in its outlook for global energy demand. 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 12,000 bbl/day. The PGR crack spread, a measure of refining margins, remains strong going into the fourth quarter averaging over $60/bbl. The Pipestone Gas Plant had its strongest quarterly run times and cash flow generation to date during the third 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. Furthermore, Tidewater is proud to have recently provided another significant update to its ESG website disclosures which now include 2020 metrics here: https://www.tidewatermidstream.com/esg/esg-metrics/

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 nine month periods ended September 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
September 30,

Nine months ended
September 30,


2021


2020


2021


2020

Revenue

$

433,961

$

273,461

$

1,163,781

$

704,493

Net income (loss) attributable to
shareholders (1)

$

1,797

$

(3,820)

$

74,473

$

(40,846)

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

$

0.01

$

(0.01)

$

0.22

$

(0.12)

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

$

0.01

$

(0.01)


0.19

$

(0.12)

Consolidated Adjusted EBITDA (2)

$

53,076

$

47,602

$

156,483

$

130,981

Net cash provided by operating activities

$

(3,827)

$

63,990

$

94,030

$

150,965

Distributable cash flow attributable to
shareholders (3)

$

15,834

$

10,578

$

50,023

$

33,626

Distributable cash flow per common share
– basic (3)

$

0.05

$

0.03

$

0.15

$

0.10

Distributable cash flow per common share
– diluted (3)

$

0.04

$

0.03

$

0.12

$

0.10

Dividends declared

$

3,403

$

3,386

$

10,188

$

10,147

Dividends declared per common share

$

0.01

$

0.01

$

0.03

$

0.03

Total common shares outstanding (000s)


340,314


338,609


340,314


338,609

Payout ratio (4)


21%


32%


20%


30%

Total consolidated assets (1)

$

1,925,201

$

1,865,715

$

1,925,201

$

1,865,715

Consolidated net debt (5)

$

643,363

$

854,870

$

643,363

$

854,870












Notes:




1

Amounts for the three and nine months ended September 30, 2020 have been restated. Refer to the "Voluntary Change in Accounting Policy"
in Tidewater Midstream's MD&A and Note 2(b) to the condensed interim consolidated financial statements for the three and nine months
ended September 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 attributable to shareholders 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. Tidewater Midstream's distributable cash flow excludes Tidewater
Renewables' distributable cash flow to non-controlling interest shareholders. 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 nine month periods ended September
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

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

DECONSOLIDATED FINANCIAL HIGHLIGHTS

This press release presents the financial information of Tidewater Midstream on a consolidated basis, unless otherwise noted. In addition to reviewing fully consolidated results, management reviews Adjusted EBITDA and net debt on a deconsolidated basis to highlight Tidewater Midstream's financial results, financial position, leverage and debt covenants, excluding the impact of the Corporation's ownership in Tidewater Renewables. Tidewater Midstream's distributable cash flow excludes Tidewater Renewables' distributable cash flow to non-controlling interest shareholders. These metrics are not defined under IFRS and may not be comparable to those used by other entities. See the "Non-GAAP" Measures section of this press release for further details.

(in thousands of Canadian dollars
except per share information)


Three months ended
September 30,

Nine months ended
September 30,


2021


2020


2021


2020

Deconsolidated Adjusted EBITDA

$

47,746

$

47,602

$

151,153

$

130,981

Deconsolidated net debt

$

609,436

$

854,870

$

609,436

$

854,870

Distributable cash flow attributable to
shareholders (excluding Tidewater
Renewables' distributable cash flow to
non-controlling interest shareholders)

$

15,834

$

10,578

$

50,023

$

33,626

Ownership in Tidewater Renewables


69%


N/A


69%


N/A

OUTLOOK AND CORPORATE UPDATE

Tidewater Midstream is pleased to deliver a record quarter of consolidated Adjusted EBITDA generation in the third 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, 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 subsidiary 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 third quarter of 2021, total throughput was approximately 12,200 bbl/day, an increase of 7% from the previous quarter and consistent with the third quarter of 2020. In August 2021, Tidewater Renewables commissioned it's canola co-processing project and began processing canola feedstock which yields both renewable gasoline and renewable diesel.

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


Q3 2021

Q2 2021

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Daily throughput (bbl)

12,209

11,459

12,095

12,187

12,180

10,569

11,576

Refinery Yield (1)








Gasoline yield

45%

45%

39%

39%

44%

42%

42%

Diesel yield

42%

43%

49%

49%

43%

43%

46%

Other (2)

13%

12%

12%

12%

13%

15%

12%






(1) Refinery yield includes crude, canola 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. Prince George crack spreads remained strong averaging just over $60/bbl during the quarter, consistent with the first and second quarter of 2021. The Corporation realized increased diesel demand during the third quarter, as compared to the second quarter of 2021, due to the end of spring breakup and continuation of the local industrial activity. Gasoline demand remained consistent quarter over quarter. The strong Prince George crack spread continues to demonstrate the strength of the regional refining market.

Tidewater Midstream continues to pursue numerous low capital and high rate of return debottleneck and optimization opportunities within its downstream business unit.

Pipestone Gas Plant

The Pipestone Gas Plant has a designed capacity of approximately 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. In 2021 the Corporation applied for and received an increase to the plant's licensed capacity to 110 MMcf/day.

The Pipestone Gas Plant processed its highest average volume of 97 MMcf/day in the third quarter of 2021, a 35% increase from the third quarter of 2020 and an increase of 5% from the second quarter of 2021. Facility availability for the third quarter of 2021 averaged 93%, an increase of 19% from the third quarter of 2020. During the month of September 2021, there was a six-day planned maintenance outage which resulted in a small decrease in facility availability as compared to the second quarter of 2021. Overall, the Pipestone Gas Plant continued to perform well during the quarter, with August averaging a record daily throughput of approximately 102 MMcf/d combined with 97% 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 third quarter of 2021, despite third-party turnarounds, maintenance activities and significant disruptions in third-party distribution infrastructure. Through multiple egress options, Tidewater Midstream maintained throughput levels at the facilities and provided optionality for producers who were constrained by third-party force majeures.

Throughput at the BRC gas processing facility for the third quarter of 2021 increased by 8% compared to the second quarter of 2021. 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.

The third quarter was notable in terms of natural gas price volatility at AECO, with cash prices ranging from $1.18 CAD/GJ to $4.80 CAD/GJ largely due to maintenance on the NGTL system. Operationally, all storage facilities performed well through the quarter and successfully met all delivery obligations. The Pipestone Gas Storage Facilities deliverability rates increased over the quarter as the facility was optimized for current reservoir pressures. Similarly, the deliverability at the Brazeau Nisku A and Brazeau Nisku F storage pools matched expectations throughout the quarter, helping meet Pioneer Pipeline's demand and realizing both storage and liquids extraction value.

The Pipestone Gas Storage Facility is largely contracted with take-or-pay contracts spanning through 2029 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 via 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.

During the third quarter of 2021, Tidewater Renewables announced its final investment decision on the 3,000 bbl/day renewable diesel and renewable hydrogen complex, which is expected to be in service the first quarter of 2023. The canola co-processing project achieved successful commissioning and start-up, slightly ahead of its planned schedule and first production of renewable diesel has commenced.

THIRD 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 third quarter 2021 results via conference call on Thursday, November 4, 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=1506446&tp_key=27428dd9e8
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 MIDSTREAM

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.

Tidewater Midstream is a majority shareholder in Tidewater Renewables Ltd. ("Tidewater Renewables"), a multi-faceted, energy transition company focusing on the production of low carbon fuels. Tidewater Renewables' common shares are publicly traded on the TSX under the symbol "LCFS".

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;

  • 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;

  • 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;

  • 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;

  • 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 the 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;

  • expectations that the Corporation's ESG profile will benefit from the majority ownership of the creation of Tidewater Renewables; 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 press release 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 press release, 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;

  • a revision to or a withdrawal of the Corporation's credit rating;

  • 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 press release 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 press release. 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 press release 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.

In addition to reviewing Adjusted EBITDA on a consolidated basis, management reviews Adjusted EBITDA on a deconsolidated basis to highlight the Corporation's performance, excluding the portion of Adjusted EBITDA attributable to Tidewater Renewables. Investors should be cautioned that Adjusted EBITDA and Deconsolidated Adjusted EBITDA should not be construed as alternatives to net income (loss), net cash provided by (used in) 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 to attributable to shareholders" 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. Distributable cash flow attributable to shareholders also deducts distributable cash flow to non-controlling interest shareholders associated with Tidewater Renewables.

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.

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