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Tidewater Midstream and Infrastructure Ltd. announces fourth quarter 2018 results and operational update and earnings call

CNW Group - Thu Mar 14, 6:00AM CDT

Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the "Corporation") (TSX:TWM.TO) is pleased to announce that it has filed its annual consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2018.

FOURTH-QUARTER AND FULL-YEAR 2018 FINANCIAL PERFORMANCE

Despite a challenging industry environment, 2018 was a record year for Tidewater both operationally and financially as volumes and earnings increased as compared to 2017. During the year, the Corporation commenced construction of approximately $400 million (gross) of new capital growth projects, experienced NGL and natural gas volume growth across its operations and executed crude oil infrastructure agreements to deliver crude oil to end markets. Tidewater delivered another record year of net income attributable to shareholders and Adjusted EBITDA growth.

Highlights

--  Net income attributable to shareholders was $13.3 million or
        $0.04 per share for the fourth quarter of 2018 compared to $0.5
        million or $0.00 per share for the fourth quarter of 2017.
    --  Tidewater delivered a record quarter of Adjusted EBITDA growth
        to $20.9 million or $0.06 per share compared to $17.0 million
        or $0.05 per share for the same period in 2017.
    --  Net cash provided by operating activities totalled $26.7
        million for the fourth quarter of 2018 with distributable cash
        flow of $17.3 million, yielding a conservative payout ratio of
        19% for the quarter (23% year-to-date).
    --  Tidewater's 100 MMcf/day sour deep-cut gas processing complex
        ("Pipestone Gas Plant") is now fully contracted and Tidewater
        has executed a gas processing contract with a second investment
        grade counterparty at Pipestone, reflecting the strategic value
        of the Pipestone Gas Plant. Tidewater has significant support
        for future gas processing and liquids handling expansions at
        Pipestone. The Pipestone project remains on time and on budget.
    --  Tidewater continues to progress construction of the Pipestone
        Gas Plant. In December 2018, Tidewater successfully drilled an
        acid gas injection well, with a salt water disposal well
        completed in January 2019. The wells provide the capacity
        necessary to accommodate higher volumes of sour gas production
        received at the plant.
    --  On October 30, 2018 Tidewater received approval from the
        Alberta Energy Regulator ("AER") to construct and operate a 120
        km natural gas pipeline connecting Tidewater's Brazeau River
        Complex ("BRC") to TransAlta Corporation's generating units at
        Sundance and Keephills.
    --  On December 17, 2018, TransAlta Corporation, through its
        subsidiary TransAlta Generation Partnership ("TransAlta")
        exercised its option to acquire a 50% ownership interest in the
        gas pipeline ("Pioneer Pipeline"). The project is supported by
        a 15 year take or pay commitment from TransAlta. Construction
        of the 120km pipeline commenced in November 2018 and is
        expected to be fully operational in the second half of 2019.
        Construction of the Pioneer Pipeline remains on schedule and on
        budget as previously disclosed.
    --  The Brazeau River Fractionation facility, part of the BRC, is
        fully contracted for the first time in Tidewater's history and
        Tidewater signed agreements with two new investment-grade
        customers at the BRC to provide fractionation services. When
        Tidewater first acquired the BRC in 2014 Tidewater had one
        customer that accounted for the majority of Adjusted EBITDA at
        the BRC. Tidewater transformed the BRC into a fractionation
        facility, with two new investment-grade counterparties in 2019,
        a gas storage facility with multiple investment-grade
        counterparties with long term contracts, and a new egress
        option with a 15 year take or pay contract with TransAlta.
    --  Tidewater continues to grow its crude oil and refined products
        infrastructure business and is focused on strengthening
        customers and contracts. Tidewater will have delivered crude
        oil to approximately 10 markets by the end of the first quarter
        of 2019.
    --  Tidewater remains confident in its ability to execute its
        previously disclosed strategic plan where net income and
        Adjusted EBITDA is expected to increase by greater than 50%,
        compared to current levels, into the fourth quarter of 2019 and
        2020 once the Pipestone Gas Plant and Pioneer Pipeline are
        operational. Tidewater continues to evaluate additional
        strategic projects that address customer needs and the
        increasing demand for natural gas, NGLs and crude oil in North
        America. 2018 was a year of growth and new project construction
        and 2019 will be a year where Tidewater will rely on its
        ability to execute and position its business for continued
        earnings growth into 2020.

Selected financial and operating information is outlined below and should be read with Tidewater's consolidated financial statements and related MD&A as at and for the year ended December 31, 2018 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)

    ---



             Year
                                                                                                          ended
                                                                           Three months               December 31,
                                                                     ended
                                                                 December 31,


                                                                           2018                              2017                           2018          2017




            Revenue                                $

              90,740                  $
            63,707         $

          324,290 $
        221,389


             Net income
              attributable to
              shareholders                          $

              13,285                     $
            504          $

          20,318  $
        12,855


             Basic and diluted
              net income
              attributable to
              shareholders per
              share                                   $

              0.04                    $
            0.00            $

          0.06    $
        0.04


             Adjusted EBITDA
              (1)                                  $

              20,924                  $
            16,974          $

          77,423  $
        61,560


             Adjusted EBITDA
              per common share
              -                                       $

              0.06                    $
            0.05            $

          0.24    $
        0.19
    basic (1)


             Net cash flow
              provided by
              operating
              activities                            $

              26,672                  $
            51,051          $

          25,655  $
        82,402


             Distributable
              cash flow (2)                         $

              17,347                  $
            12,372          $

          57,312  $
        44,994


             Distributable
              cash flow per
              common share -
              basic (1)                               $

              0.05                    $
            0.04            $

          0.17    $
        0.14


             Dividends
              declared                               $

              3,308                   $
            3,290          $

          13,184  $
        13,157


             Dividends
              declared per
              common share                            $

              0.01                    $
            0.01            $

          0.04    $
        0.04


             Total common
              shares
              outstanding
              (000s)                                                    330,797                           328,973                        330,797       328,973


             Payout ratio (3)                                               19%                              27%                           23%          29%


             Total assets                        $

              1,233,543                 $
            934,624       $

          1,233,543 $
        934,624


             Net debt (4)                          $

              392,660                 $
            151,906         $

          392,660 $
        151,906
Notes:





              1               Adjusted EBITDA is calculated as net
                                income before interest, taxes,
                                depreciation, share-based
                                compensation, unrealized gains/
                                losses, non-cash items,
                                transaction costs and items that
                                are considered non-recurring in
                                nature. Adjusted EBITDA per common
                                share is calculated as Adjusted
                                EBITDA divided by the weighted
                                average number of common shares
                                outstanding for the three-month
                                period and year ended December 31,
                                2018. Adjusted EBITDA and Adjusted
                                EBITDA per common share are not
                                standard measures under GAAP. See
                                "Non-GAAP Measures" in the
                                Corporation's MD&A for a
                                reconciliation of Adjusted EBITDA
                                and Adjusted EBITDA per common
                                share to their most closely related
                                GAAP measures.



              2               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-month period and
                                year ended December 31, 2018.
                                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.



              3               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.



              4               Net debt is defined as current
                                liabilities, plus bank debt and
                                notes payable, less current assets.
                                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 continues to position itself to provide producers with additional egress solutions and improved pricing for their products in a challenging commodity price environment by developing and connecting its infrastructure in order to access additional end markets.

During 2018, Tidewater achieved a number of operational milestones with strong demand for its services; including blending, crude oil infrastructure, and storage. In addition, the Corporation is carrying out the largest capital program in its history. Tidewater continues to execute successfully on its strategy, expanding its integrated network of assets with disciplined capital allocation.

Overall, while gas processing volumes remained under pressure compared to the first quarter of 2018, Tidewater moved significant NGL volumes and generated incremental fee for service revenue from its gas storage assets during the fourth quarter. The Corporation also began entering into new crude oil infrastructure contracts where the benefits to Tidewater's earnings will be visible in 2019. Tidewater is pleased with the progress on its two largest projects, including regulatory approval for both the Pipestone Gas Plant and Pioneer Pipeline. Both projects will provide producers with much needed egress solutions for natural gas, NGLs and condensate.

Crude Oil Infrastructure

Tidewater is aggressively growing its crude oil infrastructure business and has received significant support from producers and refiners. Tidewater is well positioned in the crude oil space with three pipe connected oil batteries at Valhalla, Brazeau and Acheson, including a large rail facility at Acheson. Tidewater expects it will deliver Canadian crude to approximately ten end markets by the end of the first quarter of 2019 while it continues to explore various market access opportunities including storage, terminals and pipelines. The majority of the agreements are for terms of less than 12 months; however, Tidewater intends to grow this business and negotiate longer term agreements with existing and new customers. Contribution to net income for crude oil infrastructure contracts in 2019 is expected to be approximately $7 - $8 million based on an average contracted volumes of 200,000 - 400,000 bbls per month at market rate loading and transportation fees to locations throughout North America. Contribution to Adjusted EBITDA is expected to be approximately $10 million after adjusting for capitalized lease and finance costs over an average of approximately 3 years.

Brazeau River Complex

Throughput at the BRC was in-line with the prior quarter where Tidewater is working diligently with producers to improve netbacks by fully utilizing the BRC's facilities including its three NGL pipeline connections, truck loading and offloading facilities, fractionation and natural gas storage facilities.

The Brazeau River Fractionation facility is fully contracted for the first time in Tidewater's history, including two new investment-grade customers signed during the first quarter of 2019. When Tidewater first acquired the BRC in 2014, the Corporation had one customer that accounted for the majority of Adjusted EBITDA at the facility. Tidewater transformed the BRC into a fractionation facility with the addition of two new investment-grade counterparties in 2019, a gas storage facility with multiple investment-grade counterparties with long term contracts and a new egress option with a 15 year take or pay contract with TransAlta, another investment grade counterparty. Tidewater has added contracts with greater than five investment-grade counterparties at the BRC which services include gas processing, gas storage, fractionation and natural gas transportation.

Natural Gas Storage

Tidewater continued to inject customer gas under long-term fee-for-service contracts at the Pipestone gas storage facility through the quarter, growing the cushion gas at the facility and increasing the injection and withdrawal capability of the storage reservoir.

Tidewater's gas storage projects remain well positioned to benefit from the low commodity price environment while acting as a natural hedge to Tidewater's core business thereby achieving its goal of offering additional egress options and improved pricing to producers.

CAPITAL PROGRAM

The Corporation's two large capital projects currently underway mainly focus on establishing a strong position in the Montney and Deep Basin development areas. It is expected the two capital programs will begin delivering incremental cash flow during the third and fourth quarters of 2019, launching the next phase in Tidewater's growth.

Pipestone Gas Plant

On October 18, 2018 Tidewater received approval from the Alberta Energy Regulator to construct and operate the Pipestone Gas Plant. The Pipestone Gas Plant is designed to process approximately 100 MMcf/day of natural gas. The total infrastructure project includes an acid gas injection well, salt water disposal well and pipelines directly connected to the Pipestone storage facility as well as connections to both Alliance and TCPL. A second investment-grade customer has executed an additional take or pay contract at the Pipestone Gas Plant in the fourth quarter of 2018. The Pipestone Gas Plant is currently fully contracted, and Tidewater has significant support for future gas processing and liquids handling expansions at the facility. The Pipestone project remains on time and on budget.

As a result of significant producer support, Tidewater is currently evaluating a condensate liquids hub at the Pipestone Gas Plant.

Tidewater began construction on the Pipestone Gas Plant in late October 2018 and expects approximately $50 - $55 million of capital remaining to be spent in 2019 with commissioning expected to occur in the third quarter of 2019. Remaining capital excludes the 32 MW cogeneration units which Tidewater expects to monetize in the first quarter of 2019.

Contribution to net income for the Pipestone Gas Plant is expected to be approximately $25 - $30 million based on plant throughput of approximately 100 MMcf/day of contracted volume at market rates over a 5 - 10 year period. Estimated annual operating costs are based on plants of similar size with sour gas processing capability and similar NGL handling capability. Adjusted EBITDA contribution is expected to be approximately $30 - $35 million after adding back depreciation and finance costs based on a 60-year useful life.

Pioneer Pipeline

On October 30, 2018, Tidewater received approval from the Alberta Energy Regulator to construct and operate the 120 km natural gas pipeline connecting Tidewater's BRC to TransAlta's generating units at Keephills, and subsequent approval for an 11km lateral connecting to Sundance. The Pioneer Pipeline will have initial capacity of 130 MMcf/day supported by a 15 year take-or-pay commitment from TransAlta, which may be expanded to approximately 440 MMcf/day. The Pipeline will allow TransAlta to increase the amount of natural gas it co-fires at its Sundance and Keephills coal-fired units, resulting in lower carbon emissions and costs.

A reconciliation of capital costs and contributions at December 31, 2018 is summarized below:

(In
                       thousands
                       of
                       Canadian
                       dollars)     Tidewater    TransAlta        Total

    ---

         Partner
         share
         of
         capital                 $
        90,000 $
         90,000 $
        180,000


        Contributions                (65,000)     (15,000)     (80,000)

    ---

        Remaining                $
        25,000 $
         75,000 $
        100,000

    ===

The Pioneer Pipeline is currently ahead of the original schedule contemplated at final investment decision. As a result, capital expenditures for the project were accelerated in Q4 of 2018.

TransAlta exercised its 50% working interest option in the Pioneer Pipeline in the fourth quarter of 2018 and is expected to fund up to its 50% of incurred capital costs on the project in the first quarter of 2019. During the year ended December 31, 2018, TransAlta made advanced refundable payments of $15 million, and $25 million in the first quarter of 2019.

Contribution to Tidewater's net income for the Pioneer Pipeline is expected to be approximately $8 - $9 million based on throughput of approximately 130 MMcf/day of contracted volume at market rate tolls over a 15 year period. Estimated annual operating costs for the pipeline are based on other pipelines within Tidewater's currently owned infrastructure of similar size and flow rate capability. Adjusted EBITDA contribution is expected to be approximately $10 million after adding back depreciation and finance costs based on a 60 year useful life.

Tidewater remains fully funded with its existing credit facility and net cash provided by operations to fund its capital program through the end of 2019.

Fourth Quarter, 2018 Earnings Call

In conjunction with this earnings release, investors will have the opportunity to listen to Tidewater senior management review its fourth quarter and full year results of fiscal 2018 via conference call on Thursday, March 14th at 11:00 am MDT.

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://event.on24.com/wcc/r/1945582/5D492C382E85A9F163B08521CED36678 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 and natural gas liquids ("NGL") 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 through the acquisition and development of oil and gas infrastructure including: gas plants, pipelines, railcars, trucks, export terminals and storage facilities.

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

Advisory Regarding Forward-Looking Statements

FORWARD-LOOKING INFORMATION

Certain statements contained in this press release constitute forward-looking statements and forward-looking information (collectively, "forward-looking statements"). Such forward-looking statements relate to possible events, conditions or financial performance of the Corporation based on future economic conditions and courses of action. All statements other than statements of historical fact are forward-looking statements. The use of any words or phrases such as "seek", "anticipate", "plan", "continue", "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 are intended to identify forward-looking statements. 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 there is a reasonable basis for the expectations reflected in the forward-looking statements, however no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon by investors.

Specifically, this news release contains forward-looking statements relating to but not limited to:

--  planned commissioning of Tidewater's Pipestone Gas Plant and
        timing thereof as well as projections with respect to
        contracting capacity, net income to be derived therefrom,
        projected operating costs and Adjusted EBITDA contribution
        estimates;
    --  plans for future gas processing and liquids handling expansions
        at the Pipestone Gas Plant;
    --  planned commissioning of the Pioneer Pipeline and timing
        thereof, projected capital and operating costs and timing for
        Tidewater's incurrence of these costs, projected closing of
        TransAlta's option to acquire an ownership interest in the
        Pioneer Pipeline, projected contribution to net income and
        Adjusted EBITDA;
    --  expectations regarding funding of capital projects;
    --  projections that Tidewater will meet its obligations and
        financial commitments and will have sufficient funding for
        anticipated capital expenditures and projections regarding
        sources of such funding;
    --  projections regarding future delivery of crude oil to end
        markets, impact of crude oil infrastructure business to net
        income and Adjusted EBITDA in 2019, plans to explore various
        market access opportunities including storage, terminals and
        pipelines;
    --  future growth of Tidewater's crude oil infrastructure business
        and expectations regarding longer term agreements with existing
        and new customers;
    --  projected plans and benefits of the Corporation's crude oil and
        refined products infrastructure business including with respect
        to future earnings and incremental Adjusted EBITDA;
    --  expectations regarding performance of NGL extraction and
        natural gas storage operations; and
    --  expectations that Tidewater will execute on its strategic plan;

Such forward-looking statements of information are based on a number of assumptions which may prove to be incorrect. In addition to other assumptions identified in this document, assumptions have been made regarding, among other things:

--  general economic and industry trends;
    --  oil and gas industry expectation and development activity
        levels and the geographic region of such activity;
    --  the success of the Corporation's operations;
    --  anticipated timelines and budgets being met in respect of the
        Corporation's projects and operations;
    --  future natural gas, crude oil and NGL prices;
    --  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 counterparties will comply with contracts in a timely
        manner;
    --  that there are no unforeseen material costs relating to the
        facilities which are not recoverable from customers;
    --  funds flow from operations and cash flow 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;
    --  the Corporation's future debt levels and the ability of the
        Corporation to repay its debt when due;
    --  foreign currency, exchange and interest rates;
    --  that any third-party projects relating to the Corporation's
        growth projects will be sanctioned and completed as expected;
    --  the amount of future liabilities relating to lawsuits and
        environmental incidents and the availability of coverage under
        the Corporation's insurance policies;
    --  the ability of the Corporation to obtain equipment, services,
        supplies and personnel in a timely manner and at an acceptable
        cost to carry out its evaluations and activities; and
    --  that all required regulatory and environmental approvals for
        capital projects can be obtained on the necessary terms and in
        a timely manner.

Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors including but not limited to:

--  general economic, political, market and business conditions,
        including fluctuations in interest rates, foreign exchange
        rates and stock market volatility;
    --  activities of producers and customers and overall industry
        activity levels;
    --  the regulatory environment and decisions and First Nations and
        landowner consultation requirements;
    --  operational matters, including potential hazards inherent in
        the Corporation's operations and the effectiveness of health,
        safety, environmental and integrity programs;
    --  fluctuations in commodity prices, inventory levels and
        supply/demand trends;
    --  actions by governmental authorities, including changes in
        government regulation, tariffs and taxation;
    --  changes in operating and capital costs, including fluctuations
        in input costs;
    --  changes in environmental and other regulations;
    --  activities of other facility owners, including access to third
        party facilities;
    --  competition for, among other things, business, capital,
        acquisition opportunities, requests for proposals, materials,
        equipment, labour and skilled personnel;
    --  environmental risks and hazards, including risks inherent in
        the transportation of NGLs which may create liabilities to the
        Corporation in excess of the Corporation's insurance coverage,
        if any;
    --  failure of third parties' reviews, reports and projections to
        be accurate;
    --  non-performance or default by counterparties to agreements
        which the Corporation or one or more of its subsidiaries has
        entered into in respect of its business;
    --  actions by joint venture partners or other partners which hold
        interests in certain of the Corporation's assets;
    --  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;
    --  changes in the political environment and public opinion;
    --  risks and liabilities associated with the transportation of
        dangerous goods;
    --  risks and liabilities resulting from derailments;
    --  competitive action by other companies;
    --  effects of weather conditions;
    --  reputational risks;
    --  reliance on key personnel;
    --  technology and security risks;
    --  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 Annual Information Form 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.

Future Oriented Financial Information

Any financial outlook or future-oriented financial information, as defined by applicable securities legislation, has been approved by management of Tidewater as of March 13, 2019. 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 purpose of the future oriented financial information contained herein including but not limited to future periods, of net income and Adjusted EBITDA is to assist investors, shareholders, and others in understanding certain financial metrics relating to expected future financial results for the purpose of evaluating the performance of Tidewater's business for future periods. This information may not be appropriate for other purposes. The results and conclusions of these assessments, along with the known and unknown risks, uncertainties and other factors referred to above, could impact Tidewater's estimates and the information related to such future periods contained herein and any such impact could be material.

Non-GAAP Measures

This news release refers to "Adjusted EBITDA" which do 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 and items that are considered non-recurring in nature.

Tidewater Management believes that Adjusted EBITDA provide useful information to investors as they provide 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. Management utilizes Adjusted EBITDA to set objectives and as a key performance indicator of the Corporation's success. 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 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.

View original content: http://www.newswire.ca/en/releases/archive/March2019/14/c3872.html

SOURCE: Tidewater Midstream and Infrastructure Ltd.

Joel MacLeod, Chairman, President and CEO, Tidewater Midstream & Infrastructure Ltd.,
Phone: 587.475.0210, Email: jmacleod@tidewatermidstream.com

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