Aug. 15 at 4:26 AM
$FECCF
Note also ... Equity Accounting for ODL ... Frontera’s 35% stake in the ODL pipeline is accounted for using the equity method. In Q2, ODL delivered
$26.8 million in hard cash dividends to Frontera. However, under IFRS, those dividend cash flows go directly onto the Cash Flow Statement (Investing/Operating Activities) and do NOT flow into Continuing Operations Net Income on the P&L.
Instead, only ODL’s net accounting income is recognized as an equity pick-up.
This creates a massive gap where cash flow per share (
$0.75/sh) vastly exceeds GAAP P&L net income (-
$0.06/sh).
Also during Q2, corporate overhead (
$2.38M) and financing costs (
$170.5M total debt/leases) were fully charged against the remaining midstream top-line (
$31.3M). The company was still paying legal, accounting, severance, and administrative fees associated with closing the Parex deal and managing the C
$590M return of capital distribution.