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Altera Infrastructure Reports Second Quarter 2022 Results

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ALTERA INFRASTRUCTURE SERVICES PTE. LTD.
ALTERA INFRASTRUCTURE SERVICES PTE. LTD.

ABERDEEN, United Kingdom, Aug. 04, 2022 (GLOBE NEWSWIRE) -- Altera Infrastructure GP LLC (Altera GP), the general partner of Altera Infrastructure L.P. (Altera or the Partnership), today reported the Partnership’s results for the quarter ended June 30, 2022.

  • Revenues of $296.2 million and net loss of $40.0 million, or $(0.11) per common unit, in the second quarter of 2022.

  • Adjusted EBITDA(1) of $129.1 million in the second quarter of 2022.

The following table presents the Partnership's Consolidated Financial Summary:

 

Three Months Ended

 

June 30,

 

March 31,

 

June 30,

 

 

 

2022

 

 

 

2022

 

Restated(2)

 

2021

In thousands of U.S. Dollars, unaudited

$

 

$

 

$

IFRS FINANCIAL RESULTS

 

 

 

 

 

Revenues

296,234

 

 

323,655

 

266,935

 

Net Income (loss)

(39,989

)

 

52,908

 

(28,488

)

Limited partners' interest in net income (loss) per common unit - basic

(0.11

)

 

0.11

 

(0.08

)

 

 

 

 

 

 

NON-IFRS FINANCIAL MEASURE:

 

 

 

 

 

Adjusted EBITDA (1)

129,146

 

 

179,528

 

109,595

 


(1)

 

Please refer to "Non-IFRS Measures" for the definition of this term and reconciliation of this non-IFRS measure as used in this release to the most directly comparable measure under IFRS.

 

 

 

(2)

 

See the unaudited interim condensed consolidated statements of income (loss) below for additional information.

The Partnership generated net loss of $40 million for the three months ended June 30, 2022, compared to net loss of $28 million for the three months ended June 30, 2021. The decrease of $12 million was primarily due to vessel impairments in the current period, absence of contribution from the Knarr FPSO going off contract May 1, 2022 and higher interest expenses in the second quarter of 2022, partially offset by higher Petrojarl I oil price tariff revenue, higher shuttle tanker utilization and lower depreciation expenses following impairments in the fourth quarter, compared to the same period during the prior year.

Adjusted EBITDA was $129 million for the three months ended June 30, 2022, compared to $110 million for the same period during the prior year. The increase of $19 million was primarily driven by higher Petrojarl I oil price tariff revenue and higher shuttle tanker utilization, partially offset by the absence of contribution from the Knarr FPSO going off contract May 1, 2022.

Operating Results

The commentary below compares certain results of the Partnership's operating segments on the basis of the non-IFRS measure of Adjusted EBITDA for the three months ended June 30, 2022 to the same period of the prior year.

The following table presents the Partnership's Adjusted EBITDA by segment (1):

 

Three Months Ended

 

June 30,

 

March 31,

 

June 30,

 

 

 

2022

 

 

 

2022

 

Restated(2)

 

2021

In thousands of U.S. Dollars, unaudited

$

 

$

 

$

FPSO

53,424

 

 

99,533

 

 

45,364

 

Shuttle Tanker

69,494

 

 

63,590

 

 

57,662

 

FSO

10,565

 

 

10,659

 

 

9,587

 

UMS

(3,940

)

 

(1,760

)

 

(1,627

)

Towage

3,649

 

 

8,990

 

 

(1,357

)

New Ventures

(678

)

 

(129

)

 

 

Corporate/Eliminations

(3,368

)

 

(1,355

)

 

(34

)

Partnership's Adjusted EBITDA

129,146

 

 

179,528

 

 

109,595

 


(1)

 

These operating segments are regularly reviewed by the Partnership's chief operating decision maker (CODM) for the purpose of allocating resources to the segment and to assess its performance. The key measure used by the CODM in assessing performance and in making resource allocation decisions is Adjusted EBITDA, which is defined in this release under the heading “Non-IFRS Measures." Adjusted EBITDA is also used by external users of the Partnership's consolidated financial statements, such as investors and the Partnership’s controlling unitholder.

 

 

 

(2)

 

See the unaudited interim condensed consolidated statements of income (loss) below for additional information.


Second Quarter 2022 Compared with Second Quarter 2021

The Partnership's FPSO segment generated Adjusted EBITDA of $53 million for the three months ended June 30, 2022, compared to $45 million for the three months ended June 30, 2021. The increase of $8 million was primarily due to Petrojarl I higher uptime and oil price tariff revenues, partially offset by an absence of contribution from the Knarr FPSO going off contract May 1, 2022.

The Partnership's Shuttle Tanker segment generated Adjusted EBITDA of $69 million for the three months ended June 30, 2022, compared to $58 million for the three months ended June 30, 2021. The increase of $11 million was primarily due to higher shuttle tanker utilization.

The Partnership's FSO segment generated Adjusted EBITDA of $11 million for the three months ended June 30, 2022, compared to $10 million for the three months ended June 30, 2021.

The Partnership's UMS segment generated an Adjusted EBITDA loss of $4 million for the three months ended June 30, 2022, compared to $2 million for the three months ended June 30, 2021. The $2 million increased loss was primarily due to mobilization costs for the Arendal Spirit UMS for its current contract as compared to being in lay-up in the prior year.

The Partnership's Towage segment generated Adjusted EBITDA of $4 million for the three months ended June 30, 2022, compared to an Adjusted EBITDA loss of $1 million for the three months ended June 30, 2021. The improvement of $5 million was primarily due to higher average day rates and utilization.

Strategic Updates

Liquidity Update
As at June 30, 2022, the Partnership had total liquidity of $186 million, compared to $241 million as at June 30, 2021, representing a decrease of $55 million.(1)

Financings
The Partnership has engaged with certain of its asset level secured lenders within its FPSO, FSO, Towage, and UMS segments to better align the terms of such debt with expected cash-flows from the applicable segment and with Brookfield Business Partners L.P. and its affiliates (or Brookfield) as secured lender to address its secured debt. The Partnership also anticipates engaging with its unsecured corporate level lenders to address its unsecured debt. As part of these efforts, the Partnership entered into extension agreements with certain of its lenders on June 16, 2022 to defer certain required payments until August 12, 2022. Furthermore, in July 2022, the Partnership opted not to make the interest payment due on July 15, 2022 for its 8.50% senior unsecured bonds with a principal amount outstanding of $276 million that mature in July 2023, and has elected to enter into a 30-day grace period for this interest payment.

Contract Updates
In July 2022, Energean Isreal Ltd. exercised an option to continue to deploy the Arendal Spirit UMS for 32 additional days.

In June 2022, Equinor ASA exercised a one-year extension option for the Randgrid FSO. The extended firm contract is effective until October 2023.

In May 2022, the Knarr FPSO ceased production on the Knarr field in the North Sea, after which decommissioning activities related to the field commenced.

Shuttle Tanker Newbuildings
In May 2022, the Partnership's final newbuilding in a series of seven, the shuttle tanker Altera Thule, commenced operations off the East Coast of Canada.

Vessel Sales
In July 2022, the Partnership sold the ALP Ace and ALP Ippon towage vessels for continued use in a non-competing industry for a total of $14 million.

In July 2022, the Partnership entered into an agreement to sell its 50% owned vessel, the Navion Gothenburg shuttle tanker for continued use for approximately $25 million (100%). Delivery is expected in August 2022.

In July 2022, the Partnership entered into an agreement to sell the Petronordic shuttle tanker for recycling for approximately $7 million. Delivery is expected in September 2022.

In May 2022, the Partnership completed the sale of the Petrojarl Varg FPSO unit for $22 million to an energy company for re-use as a production facility as part of a new field development opportunity.

In May 2022, the Partnership entered into an agreement to sell the Falcon Spirit FSO for recycling for $10 million; the vessel is expected to be delivered to the buyer in the third quarter of 2022.

(1)

 

Total liquidity is defined as Cash and cash equivalents (excluding Cash deposits with third-party restrictions).

Forward Looking Statements

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including, among others: the completion of anticipated vessel sales; the expected delivery dates of vessels subject to sales agreements; and the Partnership's engagement with its lenders relating to rescheduling outstanding debt obligations. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: the length and outcome of the Partnership's ongoing engagement with its lenders relating to its outstanding debt obligations; the duration and scope of the COVID-19 pandemic and the severity of COVID variants; the duration and effects of Russia's invasion of Ukraine; and other factors discussed in the Partnership’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2021. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

About Altera Infrastructure L.P.

Altera Infrastructure L.P. is a leading global energy infrastructure services partnership primarily focused on the ownership and operation of critical infrastructure assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Altera has consolidated assets of approximately $3.8 billion comprised of 44 vessels, including floating production, storage and offloading (FPSO) units, shuttle tankers, floating storage and offtake (FSO) units, long-distance towing and offshore installation vessels and a unit for maintenance and safety (UMS). The majority of Altera’s fleet is employed on medium-term, stable contracts.

Altera's preferred units trade on the New York Stock Exchange under the symbols "ALIN PR A", "ALIN PR B" and "ALIN PR E", respectively.

For Investor Relations inquiries contact:

Jan Rune Steinsland, Chief Financial Officer
Email: investor.relations@alterainfra.com 
Tel: +47 97 05 25 33
Website: www.alterainfra.com

ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. Dollars)

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

 

 

 

 

2022

 

Restated(1)

 

2021

 

2022

 

2021

 

$

 

$

 

$

 

$

 

$

Revenues

296,234

 

 

323,655

 

 

266,935

 

 

619,889

 

 

539,689

 

Direct operating costs

(171,082

)

 

(159,206

)

 

(169,937

)

 

(330,288

)

 

(331,778

)

General and administrative expenses

(12,135

)

 

(6,703

)

 

(8,951

)

 

(18,838

)

 

(21,619

)

Depreciation and amortization

(70,150

)

 

(71,882

)

 

(81,560

)

 

(142,032

)

 

(158,809

)

Interest expense

(59,490

)

 

(56,208

)

 

(49,475

)

 

(115,698

)

 

(97,159

)

Interest income

355

 

 

58

 

 

21

 

 

413

 

 

49

 

Equity-accounted income (loss)

9,826

 

 

22,262

 

 

10,229

 

 

32,088

 

 

29,613

 

Impairment expense, net

(38,040

)

 

 

 

 

 

(38,040

)

 

 

Gain (loss) on dispositions, net

15,700

 

 

 

 

9,107

 

 

15,700

 

 

9,107

 

Realized and unrealized gain (loss) on derivative instruments

(3,108

)

 

10,231

 

 

(1,513

)

 

7,123

 

 

12,347

 

Foreign currency exchange gain (loss)

630

 

 

1,024

 

 

(302

)

 

1,654

 

 

23

 

Other income (expenses), net

(8,795

)

 

(10,834

)

 

(1,831

)

 

(19,629

)

 

(1,857

)

Income (loss) before income tax (expense) benefit

(40,055

)

 

52,397

 

 

(27,277

)

 

12,342

 

 

(20,394

)

Income tax (expense) benefit

 

 

 

 

 

 

 

 

 

Current

66

 

 

511

 

 

(1,211

)

 

577

 

 

(2,193

)

Net income (loss)

(39,989

)

 

52,908

 

 

(28,488

)

 

12,919

 

 

(22,587

)

Attributable to:

 

 

 

 

 

 

 

 

 

Limited partners - common units

(46,277

)

 

45,410

 

 

(33,967

)

 

(867

)

 

(34,269

)

General partner

(354

)

 

347

 

 

(260

)

 

(7

)

 

(262

)

Limited partners - preferred units

7,880

 

 

7,880

 

 

7,880

 

 

15,760

 

 

15,760

 

Non-controlling interests in subsidiaries

(1,238

)

 

(729

)

 

(2,141

)

 

(1,967

)

 

(3,816

)

 

(39,989

)

 

52,908

 

 

(28,488

)

 

12,919

 

 

(22,587

)

Basic and diluted earnings (loss) per limited partner common unit

(0.11

)

 

0.11

 

 

(0.08

)

 

0.00

 

 

(0.08

)


(1)

 

The Partnership has restated its March 31, 2022 unaudited interim condensed consolidated statement of income (loss) to retrospectively show costs within Other income (expense), net that are not indicative of ongoing operations. The impact of the change as at March 31, 2022 is a reclassification of $9.8 million of General and administrative expenses to Other income (expenses), net. For additional information, please refer to Part I, Item 1. – Financial Statements: Note 2c iii) – Significant Accounting Policies in the Partnership's Report on Form 6-K for the period ended June 30, 2022.

 

ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands of U.S. Dollars)

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

 

2022

2022

 

2021

 

2022

 

2021

 

$

 

$

 

$

 

$

 

$

Net income (loss)

(39,989

)

 

52,908

 

 

(28,488

)

 

12,919

 

 

(22,587

)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

Items that will not be reclassified subsequently to net income (loss):

 

 

 

 

 

 

 

 

 

To interest expense:

 

 

 

 

 

 

 

 

 

Realized gain on qualifying cash flow hedging instruments

(182

)

 

(179

)

 

(196

)

 

(361

)

 

(386

)

To equity-accounted income (loss):

 

 

 

 

 

 

 

 

 

Realized gain on qualifying cash flow hedging instruments

(158

)

 

(159

)

 

(211

)

 

(317

)

 

(407

)

Total other comprehensive income (loss)

(340

)

 

(338

)

 

(407

)

 

(678

)

 

(793

)

Comprehensive income (loss)

(40,329

)

 

52,570

 

 

(28,895

)

 

12,241

 

 

(23,380

)

Attributable to:

 

 

 

 

 

 

 

 

 

Limited partners - common units

(46,614

)

 

45,075

 

 

(34,371

)

 

(1,540

)

 

(35,056

)

General partner

(357

)

 

344

 

 

(263

)

 

(12

)

 

(268

)

Limited partners - preferred units

7,880

 

 

7,880

 

 

7,880

 

 

15,760

 

 

15,760

 

Non-controlling interests in subsidiaries

(1,238

)

 

(729

)

 

(2,141

)

 

(1,967

)

 

(3,816

)

 

(40,329

)

 

52,570

 

 

(28,895

)

 

12,241

 

 

(23,380

)

 

ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of U.S. Dollars)

 

 

As at

 

As at

 

As at

 

 

June 30,

 

March 31,

 

December 31,

 

 

 

 

2022

 

2021

 

 

2022

 

Restated(1)

 

Restated(1)

 

 

$

 

$

 

$

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

185,561

 

 

171,305

 

 

190,942

 

Cash deposits with third-party restrictions

 

98,205

 

 

78,912

 

 

58,566

 

Financial assets

 

9,520

 

 

6,933

 

 

5,856

 

Accounts and other receivable, net

 

127,305

 

 

147,049

 

 

127,453

 

Vessels and equipment classified as held for sale

 

52,530

 

 

5,800

 

 

5,800

 

Inventory

 

42,472

 

 

31,775

 

 

26,601

 

Due from related parties

 

773

 

 

830

 

 

978

 

Other assets

 

30,504

 

 

30,706

 

 

43,668

 

Total current assets

 

546,870

 

 

473,310

 

 

459,864

 

Non-current assets

 

 

 

 

 

 

Financial assets

 

1,049

 

 

969

 

 

718

 

Vessels and equipment

 

2,786,196

 

 

2,928,453

 

 

2,869,395

 

Advances on newbuilding contracts

 

 

 

 

 

51,918

 

Equity-accounted investments

 

246,628

 

 

243,904

 

 

237,469

 

Other assets

 

122,137

 

 

128,082

 

 

138,247

 

Goodwill

 

127,113

 

 

127,113

 

 

127,113

 

Total non-current assets

 

3,283,123

 

 

3,428,521

 

 

3,424,860

 

Total assets

 

3,829,993

 

 

3,901,831

 

 

3,884,724

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable and other

 

194,793

 

 

190,249

 

 

249,297

 

Other financial liabilities

 

16,136

 

 

14,029

 

 

34,679

 

Borrowings

 

900,574

 

 

572,842

 

 

407,274

 

Due to related parties

 

10,424

 

 

32,485

 

 

 

Total current liabilities

 

1,121,927

 

 

809,605

 

 

691,250

 

Non-current liabilities

 

 

 

 

 

 

Accounts payable and other

 

45,323

 

 

47,501

 

 

49,253

 

Other financial liabilities

 

182,596

 

 

185,363

 

 

188,658

 

Borrowings

 

1,519,966

 

 

1,882,204

 

 

2,056,753

 

Due to related parties

 

843,562

 

 

820,210

 

 

797,432

 

Deferred tax liabilities

 

700

 

 

700

 

 

700

 

Total non-current liabilities

 

2,592,147

 

 

2,935,978

 

 

3,092,796

 

Total liabilities

 

3,714,074

 

 

3,745,583

 

 

3,784,046

 

EQUITY

 

 

 

 

 

 

Limited partners - Class A common units

 

(4,550

)

 

(3,963

)

 

(4,539

)

Limited partners - Class B common units

 

(315,009

)

 

(269,319

)

 

(314,153

)

Limited partners - preferred units

 

408,008

 

 

400,128

 

 

392,248

 

General partner

 

5,596

 

 

5,950

 

 

5,603

 

Accumulated other comprehensive income

 

2,133

 

 

2,473

 

 

2,811

 

Non-controlling interests in subsidiaries

 

19,741

 

 

20,979

 

 

18,708

 

Total equity

 

115,919

 

 

156,248

 

 

100,678

 

Total liabilities and equity

 

3,829,993

 

 

3,901,831

 

 

3,884,724

 


(1)

 

The Partnership has restated its March 31, 2022 and December 31, 2021 unaudited interim condensed consolidated statement of financial position to retrospectively show the change in accounting policy adopted during the three months ended June 30, 2022. The impact of the change as at March 31, 2022 and December 31, 2021 is a reclassification of $33.9 million and $13.5 million, respectively, of restricted cash from Financial assets (current) to Cash deposits with third-party restrictions and $45.0 million and $45.0 million, respectively, of restricted cash from Financial assets (non-current) to Cash deposits with third-party restrictions. For additional information, please refer to Part I, Item 1. – Financial Statements: Note 2c ii) – Significant Accounting Policies in the Partnership's Report on Form 6-K for the period ended June 30, 2022.

 

ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. Dollars)

 

Three Months Ended
March 31,

 

Six Months Ended
June 30,

 

2022

 

2021

 

 

 

2021

 

Restated(2)

 

Restated(2)

 

2022

 

Restated(2)

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net income (loss)

52,908

 

 

5,901

 

 

12,919

 

 

(22,587

)

Adjusted for the following items:

 

 

 

 

 

 

 

Depreciation and amortization

71,882

 

 

77,249

 

 

142,032

 

 

158,809

 

Equity-accounted (income) loss, net of distributions received of $24.9 million (2021 - $24.0 million)

(5,441

)

 

(990

)

 

(7,171

)

 

(5,639

)

Impairment expense, net

 

 

 

 

38,040

 

 

 

(Gain) loss on dispositions, net

 

 

 

 

(15,700

)

 

(9,107

)

Unrealized (gain) loss on derivative instruments

(25,373

)

 

(162,257

)

 

(21,375

)

 

(163,207

)

Provisions and other items

(645

)

 

(193

)

 

(3,786

)

 

188

 

Other non-cash items

15,821

 

 

12,086

 

 

34,173

 

 

22,985

 

Changes in non-cash working capital, net

(50,324

)

 

39,239

 

 

(20,923

)

 

79,464

 

Net operating cash flow

58,828

 

 

(28,965

)

 

158,209

 

 

60,906

 

Financing Activities

 

 

 

 

 

 

 

Proceeds from borrowings

63,195

 

 

75,000

 

 

63,195

 

 

75,000

 

Repayments of borrowings

(75,140

)

 

(99,367

)

 

(112,595

)

 

(195,767

)

Financing costs related to borrowings

 

 

(750

)

 

 

 

(884

)

Proceeds from borrowings related to sale and leaseback of vessels

 

 

71,400

 

 

 

 

71,400

 

Repayments of borrowings related to sale and leaseback of vessels

(2,818

)

 

(2,881

)

 

(5,636

)

 

(5,700

)

Financing costs related to borrowings from sale and leaseback of vessels

 

 

 

 

 

 

(584

)

Proceeds from borrowings from related parties

32,000

 

 

75,000

 

 

32,000

 

 

130,000

 

Prepayment of borrowings from related parties

 

 

 

 

(22,000

)

 

(30,000

)

Lease liability repayments

(3,341

)

 

(3,392

)

 

(9,108

)

 

(6,961

)

Capital contribution by non-controlling interests

3,000

 

 

 

 

3,000

 

 

 

Distributions to limited partners and preferred unitholders

 

 

(7,880

)

 

 

 

(15,760

)

Distributions to non-controlling interests

 

 

(1,750

)

 

 

 

(1,750

)

Repurchase of preferred units

 

 

(24

)

 

 

 

(24

)

Net financing cash flow

16,896

 

 

105,356

 

 

(51,144

)

 

18,970

 

Investing Activities

 

 

 

 

 

 

 

Additions

 

 

 

 

 

 

 

Vessels and equipment

(75,387

)

 

(156,317

)

 

(87,046

)

 

(168,979

)

Equity-accounted investments

(1,153

)

 

(1,172

)

 

(2,305

)

 

(2,336

)

Dispositions

 

 

 

 

 

 

 

Vessels and equipment

 

 

 

 

21,500

 

 

28,835

 

Changes in restricted cash

697

 

 

71,826

 

 

(3,813

)

 

77,445

 

Net investing cash flow

(75,843

)

 

(85,663

)

 

(71,664

)

 

(65,035

)

Total Cash and cash equivalents (1)

 

 

 

 

 

 

 

Change during the period

(119

)

 

(9,272

)

 

35,401

 

 

14,841

 

Impact of foreign exchange on cash

828

 

 

240

 

 

(1,143

)

 

369

 

Balance, beginning of the period

249,508

 

 

284,486

 

 

249,508

 

 

284,486

 

Balance, end of the period

250,217

 

 

275,454

 

 

283,766

 

 

299,696

 


(1)

 

Total Cash and cash equivalents includes Cash and cash equivalents and Cash deposits with third-party restrictions.

 

 

 

(2)

 

The Partnership has restated its three months ended March 31, 2022 and March 31, 2021 and its six months ended June 30, 2021 unaudited interim condensed consolidated statements of cash flows to retrospectively show the change in accounting policy adopted during the three months ended June 30, 2022. For additional information, please refer to Part I, Item 1. – Financial Statements: Note 2c ii) – Significant Accounting Policies in the Partnership's Report on Form 6-K for the period ended June 30, 2022.

Non-IFRS Measures

To supplement the unaudited interim condensed consolidated financial statements, the Partnership uses Adjusted EBITDA, which is a non-IFRS financial measure, as a measure of the Partnership's performance. Adjusted EBITDA represents net income (loss) before interest expense, interest income, income tax (expense) benefit, and depreciation and amortization and is adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include impairment expenses, gain (loss) on dispositions, net, unrealized gain (loss) on derivative instruments, foreign currency exchange gain (loss) and certain other income or expenses. Adjusted EBITDA also excludes: realized gain or loss on interest rate swaps (as the Partnership in assessing its performance, views these gains or losses as an element of interest expense); realized gain or loss on derivative instruments resulting from amendments or terminations of the underlying instruments; realized gain or loss on foreign currency forward contracts; equity-accounted income (loss) and other income (expense), net. Adjusted EBITDA also includes the Partnership's proportionate share of Adjusted EBITDA from its equity-accounted investments and excludes the non-controlling interests' proportionate share of Adjusted EBITDA. The Partnership does not have control over the operations of, nor does it have any legal claim to the revenues and expenses of its equity-accounted investments. Consequently, the cash flow generated by the Partnership's equity-accounted investments may not be available for use by the Partnership in the period that such cash flows are generated.

Adjusted EBITDA is intended to provide additional information and should not be considered as the sole measure of the Partnership's performance or as a substitute for net income (loss) or other measures of performance prepared in accordance with IFRS. In addition, this measure does not have a standardized meaning and may not be comparable to similar measures presented by other companies. This non-IFRS measure is used by the Partnership's management, and the Partnership believes that this supplementary metric assists investors and other users of its financial reports in comparing its financial and operating performance across reporting periods and with other companies.

Non-IFRS Financial Measures

The following table includes reconciliations of Adjusted EBITDA to net income (loss) for the periods presented in the Partnership's Consolidated Financial Summary.

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

 

 

 

2022

 

 

 

 

 

 

 

2022

 

Restated(1)

 

2021

 

2022

 

2021

(in thousands of U.S. Dollars, unaudited)

$

 

$

 

$

 

$

 

$

Adjusted EBITDA

129,146

 

 

179,528

 

 

109,595

 

 

308,674

 

 

229,865

 

Depreciation and amortization

(70,150

)

 

(71,882

)

 

(81,560

)

 

(142,032

)

 

(158,809

)

Interest expense

(59,490

)

 

(56,208

)

 

(49,475

)

 

(115,698

)

 

(97,159

)

Interest income

355

 

 

58

 

 

21

 

 

413

 

 

49

 

Expenses and gains (losses) relating to equity-accounted investments

(5,932

)

 

526

 

 

(10,606

)

 

(5,406

)

 

(15,475

)

Impairment expense, net

(38,040

)

 

 

 

 

 

(38,040

)

 

 

Gain (loss) on dispositions, net

15,700

 

 

 

 

9,107

 

 

15,700

 

 

9,107

 

Realized and unrealized gain (loss) on derivative instruments

(3,108

)

 

10,231

 

 

(1,513

)

 

7,123

 

 

12,347

 

Foreign currency exchange gain (loss)

630

 

 

1,024

 

 

(302

)

 

1,654

 

 

23

 

Other income (expenses), net

(8,795

)

 

(10,834

)

 

(1,831

)

 

(19,629

)

 

(1,857

)

Adjusted EBITDA attributable to non-controlling interests

(371

)

 

(46

)

 

(713

)

 

(417

)

 

1,515

 

Income (loss) before income tax (expense) benefit

(40,055

)

 

52,397

 

 

(27,277

)

 

12,342

 

 

(20,394

)

Income tax (expense) benefit

 

 

 

 

 

 

 

 

 

Current

66

 

 

511

 

 

(1,211

)

 

577

 

 

(2,193

)

Net income (loss)

(39,989

)

 

52,908

 

 

(28,488

)

 

12,919

 

 

(22,587

)


(1)

 

See the unaudited interim condensed consolidated statements of income (loss) above for additional information.

Adjusted EBITDA from equity-accounted investments, which is a non-IFRS financial measure and should not be considered as an alternative to equity accounted income (loss) or any other measure of financial performance presented in accordance with IFRS, represents our proportionate share of Adjusted EBITDA (as defined above) from equity-accounted investments. This measure does not have a standardized meaning, and may not be comparable to similar measures presented by other companies. Adjusted EBITDA from equity-accounted investments is summarized in the table below:

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

(in thousands of U.S. Dollars, unaudited)

$

 

$

 

$

 

$

Equity-accounted income (loss)

9,826

 

 

10,229

 

 

32,088

 

 

29,613

 

Less:

 

 

 

 

 

 

 

Depreciation and amortization

(6,823

)

 

(7,551

)

 

(13,951

)

 

(15,116

)

Interest expense, net

(1,481

)

 

(1,932

)

 

(2,594

)

 

(4,000

)

Income tax (expense) benefit

 

 

 

 

 

 

 

Current

 

 

21

 

 

(36

)

 

(26

)

 

18,130

 

 

19,691

 

 

48,669

 

 

48,755

 

Less:

 

 

 

 

 

 

 

Realized and unrealized gain (loss) on derivative instruments

2,939

 

 

(2,005

)

 

11,052

 

 

3,522

 

Foreign currency exchange gain (loss)

(567

)

 

861

 

 

123

 

 

145

 

Adjusted EBITDA from equity-accounted investments

15,758

 

 

20,835

 

 

37,494

 

 

45,088