TIDEWATER MIDSTREAM AND INFRASTRUCTURE LTD. ANNOUNCES FOURTH QUARTER 2023 RESULTS, OPERATIONAL UPDATE AND JOINT DEVELOPMENT AGREEMENT FOR SUSTAINABLE AVIATION FUEL

(TSX:TWM)

CALGARY, AB, March 14, 2024 /CNW/ - Tidewater Midstream and Infrastructure Ltd. ("Tidewater" or the "Corporation") (TSX: TWM) has filed its consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the period ended December 31, 2023.

FOURTH-QUARTER AND YEAR-END 2023 HIGHLIGHTS

• On December 22, 2023, Tidewater closed the sale of its Pipestone natural gas plant ("Pipestone Phase I"), Pipestone expansion project ("Pipestone Phase II", collectively "Pipestone"), Dimsdale natural gas storage facility ("Dimsdale") and associated gathering and other infrastructure, to AltaGas Ltd. ("AltaGas") for $665 million (the "Transaction") before closing adjustments. As consideration for the Transaction, Tidewater received $328.3 million in cash and 12,466,437 AltaGas common shares. Cash proceeds from the Transaction were used to settle credit facility debt of approximately $275 million and working capital of approximately $53.3 million.
• On January 9, 2024, Tidewater monetized its AltaGas shares for net proceeds of $341.6 million. The share proceeds were used to further reduce credit facility debt by $293 million and working capital of $48.6 million.
• In 2023, Tidewater Renewables Ltd. ("Tidewater Renewables") completed a feasibility assessment for an expansion of its renewable fuel facilities. In the first quarter of 2024 Tidewater Renewables and Tidewater entered into a joint development agreement related to a new 6,500 bbl/day renewable diesel and sustainable aviation fuel ("SAF") project in British Columbia, whereby both parties have the right to participate in up to 50% of the project upon a final investment decision. Front-end engineering design work on the SAF facility has begun, with the cost to be covered through government support in the form of capital emissions credits.
• In the fourth quarter of 2023, Tidewater Renewables achieved a transformational milestone with the Renewable Diesel and Renewable Hydrogen ("HDRD Complex") commencing commercial operations in November 2023. Commercial operations progressed during the first quarter of 2024 and the facility has been operating at its design capacity since late February 2024. Tidewater expects the HDRD Complex to achieve a utilization rate of approximately 65% in the first quarter of 2024 and to continue to operate reliably at design capacity going forward.
• Tidewater Renewables has secured purchasers for the HDRD Complex's operating emission credit production through the second quarter of 2024.
• Consolidated net loss attributable to shareholders was $331.8 million during the fourth quarter of 2023, compared to a net loss attributable to shareholders of $30.0 million during the 2022 comparative period. Full year consolidated net loss attributable to shareholders was $385.9 compared to net income attributable to shareholders of $8.5 million during the full year in 2022. The higher losses reported in 2023 are primarily a result of higher unrealized losses on derivative contracts, non-cash impairment charges taken during the fourth quarter of 2023 and the second quarter 2023 turnaround at the Prince George Refinery ("PGR") impacting full year results.
• Fourth quarter 2023 consolidated adjusted EBITDA⁽¹⁾ was $21.4 million for the quarter, compared to $60.4 million during the fourth quarter of 2022. Full year 2023 consolidated adjusted EBITDA⁽¹⁾ was $162.9 million, compared to $249.8 million during 2022. The  quarter over quarter  decrease was primarily due to lower refining margins and reduced diesel demand related to warmer weather in the fourth quarter of 2023, realized losses on derivative contracts, as well as a maintenance outage at Pipestone during the quarter, with full year 2023 results also impacted by the PGR turnaround during the second quarter of 2023.
• Subsequent to the Transaction close, the Corporation took a non-cash impairment charge of approximately $418 million on its midstream assets.

(1)	Adjusted EBITDA is a Non-GAAP financial measure. Please see the "Non-GAAP Measures" section of this news release for more information on the composition of these measures.

"I've joined Tidewater at a very exciting time and I am pleased to be a part of the team. I've had the chance to get to know our people, visit a number of key facilities and I am very encouraged by the opportunities in Tidewater's future," stated CEO Jeremy Baines. "As we move forward from a challenging 2023, the Pipestone transaction has transformed Tidewater's balance sheet and will provide us with the financial flexibility to optimize our existing asset base in 2024. The HDRD complex has reached new production milestones in 2024 and we are seeing strong demand for R30 diesel. Our team is focused on controlling costs and optimizing returns within our asset base and we will continue to de-lever to position for the long-term growth of our business. The planning stages of our SAF project have begun, which is a project that closely aligns with our conventional and renewable fuel businesses at PGR and will allow us to further expand our existing infrastructure."

 

CONSOLIDATED AND DECONSOLIDATED FINANCIAL HIGHLIGHTS
	Three months ended December 31
	Tidewater Deconsolidated (2)				Tidewater Consolidated
(in millions of Canadian dollars except per share information)		2023		2022		2023		2022
Net loss attributable to shareholders	$	(329.4)	$	(42.0)	$	(331.8)	$	(30.0)
Net loss attributable to shareholders per     share – basic	$	(0.77)	$	(0.10)	$	(0.78)	$	(0.07)
Adjusted EBITDA (1)	$	10.7	$	43.7	$	21.4	$	60.4
Distributable cash flow attributable to shareholders (1)	$	(37.4)	$	6.6	$	(36.0)	$	13.1
Distributable cash flow per share – basic (1)	$	(0.09)	$	0.02	$	(0.08)	$	0.03
Net debt (3)	$	397.3	$	539.6	$	744.0	$	750.8
Total capital expenditures	$	19.4	$	33.6	$	51.2	$	110.5

(1)	Non-GAAP financial measures. See the "Non-GAAP Measures" section of this news release for more information.
(2)	Deconsolidated results exclude the results of Tidewater Renewables. See the "Non-GAAP Financial Measures" section of this news release for information on deconsolidated measures.
(3)	Capital management measure. See the "Non-GAAP Measures" section of this news release for more information.

 

	Year ended December 31
	Tidewater Deconsolidated (2)				Tidewater Consolidated
(in millions of Canadian dollars except per share information)		2023		2022		2023		2022
Net (loss) income attributable to shareholders	$	(371.3)	$	(18.7)	$	(385.9)	$	8.5
Net (loss) income attributable to shareholders per     share – basic	$	(0.87)	$	(0.05)	$	(0.91)	$	0.02
Adjusted EBITDA (1)	$	117.0	$	187.4	$	162.9	$	249.8
Distributable cash flow attributable to shareholders (1)	$	(66.1)	$	49.3	$	(64.3)	$	75.5
Distributable cash flow per share – basic (1)	$	(0.16)	$	0.13	$	(0.15)	$	0.20
Net debt (3)	$	397.3	$	539.6	$	744.0	$	750.8
Total capital expenditures	$	87.1	$	104.7	$	292.6	$	349.3

(1)	Non-GAAP financial measures. See the "Non-GAAP Measures" section of this news release for more information.
(2)	Deconsolidated results exclude the results of Tidewater Renewables. See the "Non-GAAP Financial Measures" section of this news release for information on deconsolidated measures.
(3)	Capital management measure. See the "Non-GAAP Measures" section of this news release for more information.

STRATEGIC UPDATE

Tidewater's strategy is fundamentally supported by three key operational initiatives: maintaining safe and reliable operations, generating return on assets through maximizing facility throughputs and optimizing our existing asset base, and achieving synergies through integration. The following progress was made on these initiatives in 2023 and 2024 year to date:

Maintain safe and reliable operations	•  No lost time incidents at the PGR in 2023 during the planned     turnaround or through regular operations; •  Construction of the HDRD Complex and related commissioning     were completed with no lost time incidents.
Return on assets and optimizing existing asset base	•  Record second half 2023 throughput at the PGR; •  The HDRD Complex reached commercial operations in 2023 and     increased reliability toward design capacity in the first quarter of     2024; •  New downstream customer serviced using the infrastructure of the     HDRD Complex and PGR; •  The SAF project in British Columbia can utilize infrastructure at PGR     and the HDRD Complex; •  Operating and maintenance optimization initiatives identified     approximately $5 million of potential maintenance capital savings     and $6 million of run rate potential operating cost savings.
Corporate integration and synergies	•  Cost reduction measures to reduce up to $5 million of general     and administrative expenditures identified for 2024.

PIPESTONE & DIMSDALE TRANSACTION

On December 22, 2023, Tidewater closed the sale of its Pipestone and Dimsdale assets to AltaGas. Transaction proceeds were comprised of $328.3 million in cash and 12,466,437 AltaGas common shares, representing total proceeds of approximately $665 million. On January 9, 2024, Tidewater monetized its shareholdings in AltaGas for total proceeds of approximately $341.6 million, with the proceeds primarily being allocated to debt repayment. Transaction proceeds were allocated as follows:

Pipestone & Dimsdale Transaction Proceeds
(in millions of Canadian dollars)
December 22, 2023 cash proceeds		$	328.3
January 9, 2024 AltaGas share sale proceeds		$	341.6
Sources of Proceeds		$	669.9
Repayment of bank debt		$	568.0
December 22, 2023 Working capital repayments, transaction costs and other		$	53.3
January 9, 2024 Working capital repayments, transaction costs and other		$	48.6
Use of proceeds		$	669.9

The use of proceeds from the Transaction results in an immediate reduction in Tidewater's interest expense and simplifies the Corporation's operating and capital structure. With reduced leverage, Tidewater is well positioned to fund its base operations and pursue its strategy of providing mission critical products and services that support the growing demand for cleaner energy products.

DOWNSTREAM

Tidewater achieved record throughput at the PGR during the second half of 2023, operating above its nameplate capacity in both the third and fourth quarter. The increased throughput in the second half of 2023 is driven by catalyst and unifiner upgrades that were completed during the second quarter planned turnaround.

PGR Historical Performance:

	Q1 2022	Q2 2022	Q3 2022	Q4 2022	Q1 2023	Q2 2023	Q3 2023	Q4 2023
Daily throughput (bbl)	11,745	11,810	11,860	11,715	11,700	4,363	12,756	12,242
Refinery Yield (1)
Diesel	48 %	44 %	45 %	47 %	45 %	46 %	44 %	48 %
Gasoline	40 %	42 %	41 %	42 %	42 %	41 %	42 %	40 %
Other (2)	12 %	14 %	14 %	11 %	13 %	13 %	14 %	12 %

(1)  Refinery yield includes crude, canola and intermediates.

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

Fourth quarter refinery margins were impacted by unseasonably warm weather, which drove weaker diesel demand and impacted the downstream financial results. In December of 2023, Tidewater began selling R30 diesel and expects to significantly increase sales in the first quarter of 2024. Existing Infrastructure at the PGR provides Tidewater with the flexibility to sell renewable diesel direct to customers or blend renewable and conventional diesel, based on customer specifications.

MIDSTREAM

Midstream Gas Plant Inlet Volumes:

	Q1 2022	Q2 2022	Q3 2022	Q4 2022	Q1 2023	Q2 2023	Q3 2023	Q4 2023
Gross throughput (MMcf/day)	422	424	413	436	461	387	407	398
Pipestone (1)	98	101	69	89	104	97	95	90
BRC (2)	122	145	161	159	158	98	155	134
Ram River	101	78	102	104	112	110	88	96
Other(3)	101	100	81	84	87	82	69	78

(1)  Pipestone inlet volumes included up to December 31, 2023. (2) BRC Inlet volumes include volumes at the BRC straddle plant. (3) Inlet volumes include throughput at Tidewater's extraction facilities.

Brazeau River Complex and Fractionation Facility

During the fourth quarter, the Brazeau River Complex ("BRC") facility throughput decreased to 134 MMcf/day, a 14% decrease from the previous quarter. The BRC's fractionation facility benefitted from approximately 87% availability during the quarter.

The BRC remains one of Tidewater's core assets and is well positioned in the Deep Basin, by offering producers multiple natural gas liquids egress options through its fractionation facility, truck loading and offloading facilities, natural gas liquids pipeline connections, along with two natural gas transportation connections. The BRC's fractionation facility serves as a key asset for Tidewater's natural gas liquids marketing business.

Ram River Gas Plant

The Ram River natural gas processing facility average throughput increased to 96 MMcf/day during the fourth quarter of 2023, an 8% increase over the previous quarter. Tidewater is actively working with local third parties to increase throughput volumes, enhance overall regional processing efficiencies and maximize contracted revenues with the plant's natural gas and sulphur handling infrastructure.

Pipestone Natural Gas Plant

Tidewater closed the sale of its Pipestone assets on December 22, 2023. Facility throughput during the fourth quarter of 2023 was reduced due to maintenance activities in November.

CAPITAL PROGRAM

Tidewater's 2023 growth initiatives were primarily focused on the completion of Tidewater Renewables' HDRD Complex located at Prince George. Investments during the second quarter scheduled turnaround at PGR led to increased unifiner capacity and upgraded catalyst that contributed to record throughput volumes during the second half of 2023.                

OUTLOOK

For 2024, Tidewater expects the following operating guidance at its core facilities:

2024 Operating Guidance
Prince George Refinery		bbl/d	10,500 – 11,500
HDRD Complex(1)		bbl/d	2,400 – 2,600
Brazeau River Complex(2)		MMcf/d	100 - 120
Ram River		MMcf/d	80 - 90

(1)	First quarter 2024 throughout is expected to be 1,800 – 2,000 bbl/d, with the facility expected to operate reliably at design capacity going forward in 2024.
(2)	BRC Inlet volumes include volumes at the BRC straddle plant.

In 2024, management's top priorities are focused on generating positive operating cash flow and deleveraging. Management is currently reviewing its operating structure for cost synergies within its existing asset base. In addition, management is reviewing the scale and scope of planned maintenance spending in 2024, to ensure that maintenance projects appropriately prioritize safety and asset integrity, while maximizing our return on assets.

To date, we have identified opportunities to reduce $5 million of general and administrative expenses on a run-rate basis. In addition, at BRC we have optimized the scope of the 2024 turnaround and identified potential cost savings of approximately $5 million and an additional $6 million of potential operating cost savings on a run-rate basis. Through the remainder of 2024, we will continue to review and optimize our capital and operating expenditures, while ensuring safe and reliable operations.

Tidewater's 2024 maintenance capital program is weighted to the first half of 2024, with an expected turnaround at the BRC in the second quarter of 2024. Full year expected deconsolidated maintenance capital is expected to be in the range of $25 to $30 million.

FOURTH QUARTER 2023 EARNINGS CALL

In conjunction with the earnings release, Tidewater's executive will hold a call to review its fourth quarter 2023 results via conference call on Thursday March 14, 2024 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://app.webinar.net/7yw3EPLE8Ze 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 MIDSTREAM

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, refined product and renewable energy value chain. Its strategy is to profitably grow and create shareholder value Through the acquisition and development of conventional and renewable energy infrastructure.

To achieve its business objective, Tidewater is focused on providing customers with a full service, vertically integrated value chain through the acquisition and development of energy infrastructure, including downstream facilities, natural gas processing facilities, natural gas liquids infrastructure, pipelines, railcars, export terminals, storage, and various renewable initiatives. To complement its infrastructure asset base, the Corporation also markets crude, refined product, natural gas, natural gas liquids and renewable products and services to customers across North America.

Tidewater is a majority shareholder in 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".

Jeremy Baines	Aaron Ames
Chief Executive Officer	Interim Chief Financial Officer
Tidewater Midstream & Infrastructure Ltd.	Tidewater Midstream & Infrastructure Ltd

NON-GAAP MEASURES

Throughout this news release and in other materials disclosed by the Corporation, Tidewater uses a number of non-GAAP financial measures, non-GAAP financial ratios, capital management measures, and supplemental financial measures when assessing its results and measuring overall performance. The intent of these non-GAAP measures and ratios is to provide additional useful information to investors and analysts. Certain of these measures and ratios do not have a standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures and ratios presented by other entities. As such, these non-GAAP measures and ratios should not be considered in isolation or used as a substitute for measures and ratios of performance prepared in accordance with GAAP. Except as otherwise indicated, these financial measures will be calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods. The following are the Corporation's non-GAAP financial measures, non-GAAP ratios, capital management measures, and supplementary measures.

Non-GAAP Financial Measures

Consolidated and deconsolidated adjusted EBITDA

Consolidated adjusted EBITDA is calculated as (loss) income before finance costs, taxes, depreciation, share-based compensation, unrealized gains and losses on derivative contracts, transaction costs, gains and losses on the sale of assets, and other items considered non-recurring in nature plus the Corporation's proportionate share of EBITDA in its equity investments. Deconsolidated adjusted EBITDA is calculated as consolidated adjusted EBITDA less the portion of consolidated adjusted EBITDA attributable to Tidewater Renewables.

In accordance with IFRS, Tidewater's jointly controlled investments are accounted for using equity accounting. Under equity accounting, net earnings from investments in equity accounted investees are recognized in a single line item in the consolidated statement of net (loss) income and comprehensive (loss) income. The adjustments made to net income, as described above, are also made to share of profit from investments in equity accounted investees.

Consolidated 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 consolidated adjusted EBITDA is a measure widely used by securities analysts, investors, lending institutions, and others to evaluate the financial performance of the Corporation and other companies in the midstream industry. From time to time, the Corporation issues guidance on this key measure. As a result, consolidated adjusted EBITDA is presented as a relevant measure in this news release and the MD&A to assist analysts and readers in assessing the performance of the Corporation as seen from management's perspective. In addition to reviewing consolidated adjusted EBITDA, management reviews deconsolidated adjusted EBITDA to highlight the Corporation's performance, excluding the portion of consolidated adjusted EBITDA attributable to Tidewater Renewables. Investors should be cautioned that consolidated adjusted EBITDA and deconsolidated adjusted EBITDA should not be construed as alternatives to net (loss) income, net cash provided by 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.

The following table reconciles net (loss) income, the nearest GAAP measure, to adjusted EBITDA:

	Three months ended December 31,				Year ended December 31,
(in millions of Canadian dollars)		2023		2022		2023		2022
Net (loss) income	$	(338.6)	$	(24.9)	$	(399.2)	$	18.9
Deferred income tax (recovery) expense		(33.2)		(8.9)		(51.0)		7.6
Depreciation		26.3		23.6		96.8		84.4
Finance costs and other		26.6		18.6		99.9		69.9
Share-based compensation		2.2		2.8		13.9		13.5
Impairment expense		417.6		55.0		417.6		55.0
(Gain) loss on sale of assets		(112.1)		(4.0)		(110.8)		5.4
Unrealized loss (gain) on derivative contracts		8.6		(21.8)		52.8		(32.0)
Unrealized gain on marketable securities		(5.9)		-		(5.9)		-
Transaction costs		9.1		2.8		13.6		6.5
Non-recurring transactions		7.1		0.7		16.7		2.1
Other non-cash expenses		6.4		-		6.4		-
Adjustment to share of profit from equity accounted        Investments		7.3		16.5		12.1		18.5
Consolidated adjusted EBITDA	$	21.4	$	60.4	$	162.9	$	249.8
Less: Consolidated adjusted EBITDA attributable to     Tidewater Renewables		(10.7)		(16.7)		(46.1)		(62.4)
Deconsolidated adjusted EBITDA	$	10.7	$	43.7	$	117.0	$	187.4

Distributable cash flow and deconsolidated distributable cash flow attributable to shareholders

Distributable cash flow attributable to shareholders is a non-GAAP measure. Distributable cash flow is calculated as net cash provided by operating activities before changes in non-cash working capital, plus cash distributions from investments, transaction costs, non-recurring transactions, and less other expenditures that use cash from operations. Also deducted is the distributable cash flow of Tidewater Renewables that is attributed to non-controlling interest shareholders. Management 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.

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. Transaction costs are added back as they can vary significantly based on the Corporation's acquisition and disposition activity. Non-recurring transactions that do not reflect Tidewater's ongoing operations are also excluded. Lease payments, interest and financing charges, and maintenance capital expenditures, including turnarounds, are deducted as they are ongoing recurring expenditures which are funded from operating cash flows.

Deconsolidated distributable cash flow is calculated by subtracting the portion of Tidewater Renewables' distributable cash flow that is attributed to shareholders of Tidewater from distributable cash flow attributable to shareholders.

The following table reconciles net cash provided by operating activities, the nearest GAAP measure, to distributable cash flow and deconsolidated distributable cash flow:

	Three months ended December 31,				Year ended December 31,
(in millions of Canadian dollars)		2023		2022			2023		2022
Net cash (used in) provided by operating activities	$	(5.2)	$	66.7	$	137.5		$	242.9
Add (deduct):
Changes in non-cash operating working capital		0.7		(19.4)		(37.3)			(19.8)
Transaction costs		9.1		2.8		13.6			6.5
Non-recurring transactions		7.1		0.7		16.7			2.1
Interest and financing charges		(20.8)		(11.7)		(70.9)			(43.0)
Payment of lease liabilities and other, net of sublease     payments		(11.7)		(11.7)		(47.0)			(47.8)
Maintenance capital		(14.5)		(11.4)		(76.0)			(53.5)
Tidewater Renewables' distributable cash flow to non-     controlling interest shareholders		(0.7)		(2.9)		(0.9)			(11.9)
Distributable cash flow attributable to shareholders	$	(36.0)	$	13.1	$	(64.3)		$	75.5
Tidewater Renewables' distributable cash flow attributed     to shareholders of Tidewater	$	(1.4)	$	(6.5)	$	(1.8)		$	(26.2)
Deconsolidated distributable cash flow attributable to     shareholders	$	(37.4)	$	6.6	$	(66.1)		$	49.3

Growth capital expenditures are generally funded from retained operating cash flow and additional debt or equity, as required.

Non-GAAP Financial Ratios

Distributable cash flow and deconsolidated distributable cash flow per share

Distributable cash flow and deconsolidated distributable cash flow are non-GAAP financial measures.  Distributable cash flow per share is calculated as distributable cash flow attributable to shareholders divided by the basic or diluted weighted average number of common shares outstanding for the period. Deconsolidated distributable cash flow per share is calculated as deconsolidated distributable cash flow attributable to shareholders divided by the basic or diluted weighted average number of common shares outstanding for the period. Management believes that these measures provide investors an indicator of funds generated from the business that could be allocated to each shareholder's equity position.

	Three months ended December 31,				Year ended December 31,
(in millions of Canadian dollars except share and per share information)		2023		2022		2023		2022
Distributable cash flow attributable to shareholders	$	(36.0)	$	13.1	$	(64.3)	$	75.5
Deconsolidated distributable cash flow attributable to     shareholders	$	(37.4)	$	6.6	$	(66.1)	$	49.3
Weighted average common shares outstanding – basic     (millions)		427.1		423.5		425.4		372.1
Weighted average common shares outstanding –     diluted (millions)		427.1		423.5		425.4		380.4
Distributable cash flow per share – basic	$	(0.08)	$	0.03	$	(0.15)	$	0.20
Deconsolidated distributable cash flow per share –     basic	$	(0.09)	$	0.02	$	(0.16)	$	0.13
Distributable cash flow per share – diluted	$	(0.08)	$	0.03	$	(0.15)	$	0.20
Deconsolidated distributable cash flow per share –     diluted	$	(0.09)	$	0.02	$	(0.16)	$	0.13

Capital Management Measures

Tidewater's methods for managing capital and liquidity are discussed within note 24 of the audited consolidated financial statements for the year ended December 31, 2023.

Consolidated and deconsolidated net debt

Consolidated net debt is defined as bank debt, term debt, notes payable and convertible debentures, less cash. Consolidated net debt is used by the Corporation to monitor its capital structure and financing requirements. It is also used as a measure of the Corporation's overall financial strength. In addition to reviewing consolidated net debt, management reviews deconsolidated net debt to highlight Tidewater's financial flexibility, balance sheet strength and leverage. Deconsolidated net debt is calculated as consolidated net debt less the portion attributable to Tidewater Renewables.

Consolidated and deconsolidated net debt exclude working capital, lease liabilities and derivative contracts as the Corporation monitors its capital structure based on deconsolidated net debt to deconsolidated adjusted EBITDA, consistent with its credit facility covenants as described in the "Liquidity and Capital Resources" section of the MD&A.

The following table reconciles consolidated and deconsolidated net debt:

(in millions of Canadian dollars)		December 31,    2023		December 31,   2022
Tidewater Midstream Senior Credit Facility	$	322.3	$	470.2
Tidewater Renewables Senior Credit Facility		171.8		72.6
Tidewater Renewables Term Debt Facility		175.0		150.0
Convertible debentures - principal		75.0		75.0
Cash		(0.1)		(17.0)
Consolidated net debt	$	744.0	$	750.8
Less: Tidewater Renewables Senior Credit Facility		(171.8)		(72.6)
Less: Tidewater Renewables Term Debt Facility		(175.0)		(150.0)
Add: Tidewater Renewables cash		0.1		11.4
Deconsolidated net debt	$	397.3	$	539.6

Supplementary Financial Measures

"Growth capital" expenditures are generally defined as expenditures which are recoverable or incrementally increase cash flow or earnings potential of assets, expand the capacity of current operations or significantly extend the life of existing assets. This measure is used by the investment community to assess the extent of discretionary capital spending.

"Maintenance capital" expenditures are generally defined as expenditures which support and/or maintain the current capacity, cash flow or earnings potential of existing assets without the associated benefits characteristic of growth capital expenditures. These expenditures include major inspections and overhaul costs that are required on a periodic basis. This measure is used by the investment community to assess the extent of non-discretionary capital spending. Maintenance capital is included in the calculation of distributable cash flow.

Deconsolidated "net (loss) income attributable to shareholders" is comprised of net income or loss attributable to shareholders, as determined in accordance with IFRS, less the net income or loss of Tidewater Renewables attributed to the shareholders of Tidewater.

Deconsolidated "net (loss) income attributable to shareholders – per share" is calculated by dividing deconsolidated "net income or loss attributable to shareholders" by the basic weighted average number of Tidewater common shares outstanding for the period.

Deconsolidated "Total capital expenditures" is comprised of consolidated capital expenditures, as disclosed in Tidewater's statement of cash flows, less the capital expenditures of Tidewater Renewables.

OPERATIONAL DEFINITIONS

"bbl/d" means barrels per day; "MMcf/d" means million cubic feet per day.

"Crack spread" refers to the general price differential between crude oil and the petroleum products refined from it.

"Refinery yield" (expressed as a percentage) represents the percentage of finished product produced from inputs of crude oil and renewable feedstock as well as intermediates. Refinery yields are an important measure of refinery performance indicating the outputs that running a particular feedstock and intermediates through a refinery configuration will produce.

"Throughput" with respect to a natural gas plant, means inlet volumes processed (including any off-load or reprocessed volumes); with respect to a pipeline, the estimated natural gas or liquid volume transported therein; and with respect to NGL processing facilities, means the volume of inlet NGLs processed.

Advisory Regarding Forward-Looking Statements

Certain statements contained in this news 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 news release should not be unduly relied upon.

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

• Tidewater expects the HDRD Complex to achieve a utilization rate of approximately 65% in the first quarter of 2024 and to continue to operate reliably at design capacity going forward;
• Tidewater deconsolidated maintenance capital guidance for 2024;
• the Pipestone transaction has transformed Tidewater's balance sheet and will provide us with the financial flexibility to optimize our existing asset base in 2024;
• Tidewater's focus on controlling costs and optimizing returns within our asset base and we will continue to de-lever to position for the long-term growth of our business;
• the SAF project will allow Tidewater to further expand its existing infrastructure;
• operating and maintenance optimization initiatives identified approximately $5 million of potential maintenance capital savings and $6 million of run rate potential operating cost savings;
• with reduced leverage, Tidewater is well positioned to fund its base operations and pursue its strategy of providing mission critical products and services that support the growing demand for cleaner energy products;
• Tidewater having the flexibility to sell renewable diesel direct to customers or blend renewable and conventional diesel, based on customer specifications;
• Tidewater's expectations regarding future growth initiatives;
• Tidewater's ongoing efforts at the Ram River natural gas processing facility to work with local third parties to increase throughput volumes, enhance overall regional processing efficiencies and maximize contracted revenues with the plant's sulphur handling infrastructure;
• the Corporation's expectations regarding updating its 2024 outlook for deconsolidated adjusted EBITDA;
• management's top priorities are focused on generating positive operating cashflow and deleveraging; and
• management review of Tidewater's operating structure for cost synergies within its existing asset base, and its review of the scale and scope of planned maintenance spending in 2024, to ensure that maintenance projects appropriately prioritize safety and asset integrity, while maximizing our return on assets.

Although the forward-looking statements contained in this news 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 news release, the Corporation has assumptions regarding, but not limited to:

• Tidewater's ability to execute on its business plan;
• the timely completion of the Transaction;
• the timely receipt of all governmental and regulatory approvals sought by the Corporation;
• that PGR crack spreads remain strong and refined product demand continues to increase;
• general economic and industry trends;
• future commodity prices, including natural gas, crude oil, NGL and renewable energy prices;
• impacts of commodity prices and demand on the Corporation's working capital requirements; ‎
• continuing government support for existing policy initiatives;
• processing and marketing margins;
• impacts of seasonality and climate disruptions;
• future capital expenditures to be made by the Corporation;
• foreign currency, exchange and interest rates, and expectations relating to inflation;
• that there are no unforeseen events preventing the performance of contracts;
• the availability of equipment and personnel required for Tidewater to execute its business plan;
• the amount of future liabilities relating to lawsuits and environmental incidents and the availability of coverage under the Corporation's insurance policies;
• volume demands from the PGR are consistent with forecasts;
• successful negotiation and execution of agreements with counterparties;
• oil and gas industry exploration and development activity 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;
• the amount of operating costs to be incurred;
• that there are no unforeseen costs relating to the facilities, 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;
• credit rating changes;
• the successful integration of acquisitions and projects into the Corporation's existing business; 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 and renewable products;
• general economic, political, market and business conditions, including fluctuations in interest rates, foreign exchange rates, stock market volatility, supply/demand trends, armed hostilities, acts of war, terrorism, cyberattacks, diplomatic developments and inflationary pressures;
• 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;
• the conflict in Ukraine and the corresponding impact on supply chains and the global economy;
• 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;
• changes in environmental and other laws and regulations or the interpretations of such laws or ‎‎‎regulations‎;
• ‎cost of compliance with applicable regulatory regimes, including, but not limited to, environmental laws and regulations, including greenhouse gas emissions;
• Indigenous 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 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;
• losses of key customers;
• 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;
• changes in the credit rating of the Corporation, and the impacts of this on the Corporation's access to ‎private and public credit markets in the future and increase the costs of borrowing; ‎
• adverse claims made in respect of the Corporation's properties or assets;
• risks and liabilities associated with the transportation of dangerous goods and derailments;
• effects of weather conditions (such severe weather or catastrophic events including, but not limited to, fires, floods, lightning, earthquakes, extreme cold weather, storms or explosions);
• reputational risks
• 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 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 news 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 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 news release. 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, other than as required by applicable securities law. All forward-looking statements contained in this news 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.sedarplus.com.

SOURCE Tidewater Midstream and Infrastructure Ltd.

Copyright 2024 Canada NewsWire