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

May 13, 2021

CALGARY, AB, May 13, 2021 /CNW/ - Tidewater Midstream and Infrastructure Ltd. ("Tidewater" 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 month period ended March 31, 2021.

FIRST-QUARTER 2021 FINANCIAL PERFORMANCE

Highlights

• The first quarter of 2021 represented Tidewater's eighth consecutive quarter of Adjusted EBITDA growth. This performance continues to highlight the resiliency and stability of its integrated business model. Adjusted EBITDA increased to $51.1 million in the first quarter of 2021 as compared to $41.5 million in the first quarter of 2020, resulting in 23% Adjusted EBITDA growth. Adjusted EBITDA also increased by $2.3 million as compared to the fourth quarter of 2020 resulting in 5% Adjusted EBITDA growth. Net income attributable to shareholders was $8.4 million for the first quarter of 2021 as compared to a net loss of $38.1 million in the first quarter of 2020. This increase is the result of unrealized gains on derivative contracts and increased operating income driven predominantly by higher commodity prices.
• Net cash provided by operating activities totaled $55.5 million for the first quarter of 2021, with distributable cash flow of $16.9 million and a payout ratio of 20%.
• Tidewater continues to evaluate multiple financing options for its renewable initiatives including its proposed 3,000 bbls/day renewable diesel and renewable hydrogen facility for which the Corporation has received approximately $100 million in BC Government support for the total $215 to $235 million capital cost. The financing options being pursued would not add incremental leverage to the Corporation. Tidewater has a vital role to play in the long-term renewable energy transition in Canada and is currently developing clean fuels through its existing hydrogen and carbon capture assets, its ability to blend ethanol and renewable diesel and its current canola co-processing project. Tidewater is also evaluating opportunities in various renewable energy initiatives including renewable diesel, co-processing, renewable hydrogen, blue hydrogen, renewable natural gas, carbon capture and other renewable energy projects.
• The Corporation, together with its partner TransAlta Corporation ("TransAlta"), continues to move forward with the sale of its Pioneer Pipeline to ATCO Gas and Pipelines Ltd. ("ATCO") for gross proceeds of $255 million (the "Pioneer Transaction"). Net cash proceeds to Tidewater are anticipated to be approximately $135 million which includes certain ancillary assets and completion of budgeted restoration work to be paid for by TransAlta. The transaction is subject to customary conditions for a transaction of this nature including regulatory approvals by the Alberta Utilities Commission ("AUC") and the Alberta Energy Regulator. Regulatory approval is anticipated in the second quarter of 2021.
• Tidewater's top priorities remain free cash flow generation and debt reduction. Tidewater is committed to reducing leverage throughout 2021 with a target of 3.0x to 3.5x Net Debt to annualized Adjusted EBITDA, subsequent to the closing of the Pioneer Transaction.
• Tidewater is optimistic in its outlook for global energy demand as commodity prices strengthen. Within Western Canada, Tidewater 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 bbls/day with combined gasoline and diesel production over 10,500 bbls/day. The PGR crack spread, a measure of refining margins, continues to be strong going into the second quarter at approximately $60/bbl. The Pipestone Gas Plant again had its strongest quarterly run times and cashflow generation to date during the first quarter of 2021.
• The Corporation is committed to its Environmental, Social and Governance ("ESG") performance. Tidewater is committed to enhancing its disclosures and in November published a significant increase in ESG metrics and corporate policies which highlight several improving trends. This information 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 month period ended March 31, 2021 which are available at www.sedar.com and on our website at www.tidewatermidstream.com.

Financial Overview

Consolidated Financial Highlights

OUTLOOK AND CORPORATE UPDATE

Tidewater is pleased to deliver a record quarter of EBITDA generation in the first quarter of 2021 as the Prince George Refinery 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, has had an overall positive impact on producer balance sheets and Tidewater continues to work with its producer customers on ways to improve margins and related service offerings. Tidewater 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 is uniquely positioned to play a key role in the continued development of renewable fuels, carbon capture, renewable natural gas and renewable hydrogen.

Tidewater remains committed to reducing leverage with the anticipated $135 million in proceeds from the Pioneer Transaction used primarily for debt repayment. A large portion of Tidewater's cashflow is generated from take-or-pay contracts and long-term agreements with over 50% generated from investment grade counterparties. Tidewater remains committed to its target of 3.0x to 3.5x Net Debt to annualized Adjusted EBITDA, subsequent to the closing of the Pioneer Transaction.

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 first quarter of 2021, total throughput exceeded the refinery's nameplate capacity at approximately 12,095 bbl/day, consistent with the fourth quarter of 2020 and 4% higher than the first quarter of 2020.

Tidewater's refined product yields at PGR were as follows:

PGR will be executing its planned annual maintenance during the second quarter of 2021, which will reduce refinery throughput by approximately 5% below the first quarter average.  As a result of the annual maintenance program, spring breakup and increased COVID restrictions in both BC and Alberta, Tidewater expects second quarter earnings at PGR to be moderately lower than the first quarter.

Tidewater'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. During the first quarter of 2021, Tidewater realized improved margins on both diesel and gasoline due to improved refined product pricing. Demand for both gasoline and diesel increased during the first quarter of 2021 due to increased activity in the Prince George area with crack spreads averaging $60/bbl during the quarter. This demonstrates the refinery's long-term value in servicing the markets in which it operates.

Tidewater is progressing on its canola co-processing project and expects it to be online in late 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. The Corporation continues to evaluate various renewable initiatives at PGR. These include expanding existing hydrogen assets, renewable hydrogen and the potential for a large-scale renewable diesel project with current support from the BC provincial government. Renewable diesel results in an approximate 80% - 90% reduction in greenhouse gas ("GHG") emissions compared to conventional diesel and performs better in colder temperatures as compared to biodiesel. Tidewater 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 is designed to process 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 system for the C2+ and C5+ liquid streams.

The Pipestone Gas Plant processed an average volume of 83 MMcf/day in the first quarter of 2021, a 32% increase from Q1 2020 and an increase of 13% from Q4 2020. Facility availability for the quarter averaged 85%, an increase of 8% from Q4 2020. Plant throughput was strong in January and March, averaging approximately 90 MMcf/day, but was affected by below average colder weather conditions in February. The Pipestone Gas Plant is fully contracted with over 80% committed capacity on take-or-pay arrangements.

Pioneer Pipeline

The Pioneer Pipeline is currently jointly owned and operated by Tidewater and TransAlta. The asset is held for sale, subject to closing of the Pioneer Transaction which is subject to customary conditions in a transaction of this nature including regulatory approvals by the AUC and the Alberta Energy Regulator. Following the execution of the purchase and sale agreement, the parties filed applications for regulatory approval. Final regulatory approval is anticipated in the second quarter of 2021.   

Upon closing the Pioneer Transaction, the Pioneer Pipeline will be integrated into NOVA Gas Transmission Ltd.'s ("NGTL") and ATCO's Alberta integrated natural gas transmission systems to provide a reliable natural gas supply to TransAlta's power generating units at Sundance and Keephills. 

Tidewater has entered into a Project and Expenditure Authorization Agreement with NGTL at the Rat Creek West Meter Station for the natural gas liquids extraction service (OS-Ext) that will allow Tidewater to extract higher value liquids from the natural gas stream prior to delivery of natural gas at the TransAlta facilities. Tidewater does not expect any facility modifications or capital expenditures to be required to implement this service. It is expected that with this service, Tidewater will be able to materially increase throughput at its Brazeau River Complex, subject to market conditions. It is anticipated that this service will commence concurrent with the close of the Pioneer Transaction.

Brazeau River Complex and Fractionation Facility

The BRC is a core asset for Tidewater, 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 three natural gas egress solutions including the NGTL system, the Pioneer Pipeline, and gas storage. 

NGL volumes through the fractionation facility increased by 450 bbl/day, compared to the fourth quarter of 2020. The facility continued to perform well throughout the quarter despite the colder seasonal temperatures through the month of February. 

Throughput at the BRC gas processing facility averaged 125 MMcf/day, resulting in the highest raw gas volumes since 2018. Strong AECO gas prices in the past six months have increased producer activity near the BRC, and Tidewater continues to look for opportunities to increase third party plant throughput.  Tidewater works diligently with producers to improve netbacks by fully utilizing the BRC's facilities.

Natural Gas Storage

Tidewater operates natural gas storage reservoirs at three different facilities: 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 first quarter as we moved through to the end of the traditional winter withdrawal season. The Pipestone Storage facility delivered its highest withdrawal rates of any quarter (exceeding 60,000 GJ/day) in early January with deliverability rates gradually decreasing as the facility depressurized.   

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

Consistent with the rest of the continent, the Alberta natural gas market saw heightened price volatility in mid-February corresponding with cold temperatures. Operationally, all storage facilities performed well through the period and successfully met all delivery obligations as daily prices approached $6.00/GJ.  Volatility was less pronounced in January and March with cash prices generally trading in the $2.30/GJ to $2.90/GJ range. 

The Pipestone Gas Storage Facility is fully contracted with take-or-pay contracts spanning through 2027 with multiple investment grade counterparties. The facility represents a significant contribution to Tidewater'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's 2021 capital program focuses on small-scale optimization projects along with its canola co-processing project at PGR. To date, Tidewater has not committed to a significant capital program in 2021, however continues to evaluate smaller capital projects with strong short-term returns on investment.

Tidewater's 300 bbl/day canola co-processing project at PGR is expected to be online in the fourth quarter of 2021 which will produce both renewable diesel and gasoline. Total capital for the project is approximately $10 million and includes significant support from the BC government.

ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS

Tidewater will hold its 2021 Annual General and Special Meeting of Shareholders at Livingston Place – West Tower, Suite 1000, 250 – 2^nd Street S.W.‎, Calgary, Alberta T2P 0C1‎ on Tuesday, June 29, 2021 at 2:30 p.m. (Calgary time).

Due to the public health restrictions implemented to combat the spread of the COVID-19 pandemic, including restrictions on mass gatherings implemented by the Government of Alberta and taking into account the health and safety of our employees, shareholders, service providers and other stakeholders, the Corporation strongly encourages shareholders not to attend the meeting in person. The meeting is not a virtual-only meeting, however, the Corporation strongly encourages shareholders to vote by proxy, by mail, by telephone or on the internet, rather than attending the meeting in ‎person. To this end, only registered shareholders and proxyholders will be permitted to attend the meeting in person. ‎

In order to permit shareholders and proxyholders to listen to the meeting in real time, without ‎having to attend in person, a conference call of the Meeting will be available as follows:‎

• North America Toll-Free: 647-427-7450
• Local / International: ‎1-888-231-8191
• AudioWebcast: https://produceredition.webcasts.com/starthere.jsp?ei=1460123&tp_key=a3547d5a0a

Shareholders will not be able to vote through the conference call; however, there will be a question and ‎answer session following the termination of the formal business of the meeting during which shareholders ‎attending the conference call can ask questions.

FIRST QUARTER 2021 EARNINGS CALL  

In conjunction with the earnings release, investors will have the opportunity to listen to Tidewater senior management review its first quarter 2021 results via conference call on Thursday, May 13, 2021 at 11:00 am MDT (1:00 pm EDT).

To access the conference call by telephone, dial 647-427-7450 (local / international participant dial in) or 1-888-231-8191 (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=1455694&tp_key=94129283e2 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 is traded on the TSX under the symbol "TWM". Tidewater's business objective is to build a diversified midstream and infrastructure company in the North American natural gas, natural gas liquids, crude oil and refined product space. Its strategy is to profitably grow and create shareholder value through the acquisition and development of oil and gas infrastructure. Tidewater 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 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 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 Pioneer Transaction;
• 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;
• 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;
• the anticipated closing of the transaction to sell the Pioneer Pipeline to ATCO, the sale of certain ancillary assets to TransAlta Corporation, the Corporation's expectations regarding timing to close such transactions, the Corporation's expectations regarding receipt of regulatory approval for such transactions;
• anticipated integration of the Pioneer Pipeline into NGTL's and ATCO's Alberta integrated natural gas transmission systems;
• timing and completion of, projected use of proceeds from, and financial impact of, the sale of the Pioneer Pipeline;
• impact of planned annual maintenance on PGR;
• expectations relating to the Project and Expenditure Authorization Agreement 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's expectations to pay dividends from distributable cash flow;
• timing of, and expectations relating to, the Corporation's ESG report;
• the environmental impact of the Corporation's small-scale projects endorsed by the Emissions Reduction Fund; and
• expectations that net cash provided by operating activities, cash flow generated from growth projects and cash available from Tidewater'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'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 anticipated sale of the Pioneer Pipeline;
• 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 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 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 availability of capital to fund future capital requirements relating to existing assets and projects;
• the ability of Tidewater 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;
• 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'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.

The above summary of assumptions and risks related to forward-looking statements in this press release is intended to provide shareholders and potential investors with a more complete perspective on Tidewater's current and future operations and such information may not be appropriate for other purposes. There is no representation by Tidewater that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and Tidewater 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, except as may be required by applicable securities law.

Any financial outlook or future-oriented financial information, as defined by applicable securities legislation, has been approved by management of Tidewater as of May 12, 2021. A financial outlook or future-oriented financial information is provided for the purpose of providing information about management's current expectations and goals relating to the future of Tidewater. Readers are cautioned that reliance on 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 off 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.  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.

"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.