NEW YORK--(BUSINESS WIRE )--New Fortress Energy Inc. (NASDAQ: NFE) (“NFE” or the “Company”) today reported its financial results for the first quarter of 2022.
(in millions, except Average Volumes)
Terminals and Infrastructure Segment Operating Margin(4)
Please refer to our Q1 2022 Investor Presentation (the “Presentation”) for further information about the following terms:
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investors section of New Fortress Energy’s website, www.newfortressenergy.com, and the Company’s most recent Annual Report on Form 10-K, which is available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Management will host a conference call on Thursday, May 5, 2022 at 8:00 A.M. Eastern Time. The conference call may be accessed by dialing (866) 953-0778 (from within the U.S.) or (630) 652-5853 (from outside of the U.S.) fifteen minutes prior to the scheduled start of the call; please reference “NFE First-Quarter 2022 Earnings Call."
A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.newfortressenergy.com. Please allow extra time prior to the call to visit the website and download any necessary software required to listen to the internet broadcast.
A replay of the conference call will be available after 11:00 A.M. Eastern Time on May 5, 2022 through 11:00 A.M. Eastern Time on May 12, 2022 at (855) 859-2056 (from within the U.S.) or (404) 537-3406 (from outside of the U.S.), Passcode: 4257013.
About New Fortress Energy Inc.
New Fortress Energy Inc. (NASDAQ: NFE) is a global energy infrastructure company founded to help address energy poverty and accelerate the world’s transition to reliable, affordable, and clean energy. The company owns and operates natural gas and liquefied natural gas (LNG) infrastructure, ships, and logistics assets to rapidly deliver turnkey energy solutions to global markets. Collectively, the company’s assets and operations reinforce global energy security, enable economic growth, enhance environmental stewardship and transform local industries and communities around the world.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements contained in this press release constitute “forward-looking statements” including: our expected delivery and sales volumes of LNG and growth goals, including with respect to ability to finalize definitive agreements, cargo optimization, and other drivers; expected needs for LNG supply and demand in the future; expectations regarding ability to construction, complete and commission our projects on time and within budget to derive expected goals and benefits; ability to maintain our expected development timelines; expected or illustrative financial metrics; our ability to finalize and execute definitive agreements with Eni and to fulfill all of the conditions precedent to effectiveness under our HOA; expectations regarding our benefits from our Fast LNG asset and ability to use our current assets for our Fast LNG project; expectations regarding our ability to place our Fast LNG asset into service within our expected timeline; our ability to match our LNG supply and demand profile; our expected needs for LNG supply in the future; our ability to reach FID on our NFE Zero Parks facility; capitalization of NFE Zero Parks; and the implementation and success of our financing alternatives, including any asset sales. You can identify these forward-looking statements by the use of forward-looking words such as “expects,” “may,” “will,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of those words or other comparable words. These forward-looking statements represent the Company’s expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the risk that the volumes we are able to sell are less than we expect due to decreased customer demand or our inability to supply; our ability to successfully benefit from current elevated and volatile commodity market environment; the risk that our development, construction or commissioning of our facilities will take longer than we expect; the risk that we fail to meet internal financial metrics or financial metrics posed by the market on us; the risk that we may not develop our Fast LNG project on the timeline we expect or at all, or that we do not receive the benefits we expect from the Fast LNG project; cyclical or other changes in the demand for and price of LNG and natural gas; the risk that the foregoing or other factors negatively impact our liquidity and our ability to capitalize our projects; and the risk that we may be unable to implement our financing strategy or to effectively leverage our assets. Accordingly, readers should not place undue reliance on forward-looking statements as a prediction of actual results.
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in the Company’s annual and quarterly reports filed with the SEC, which could cause its actual results to differ materially from those contained in any forward-looking statement.
Condensed Consolidated Statements of Operations For the three months ended December 31, 2021 and March 31, 2022 (Unaudited, in thousands of U.S. dollars, except share and per share amounts)
For the Three Months Ended
Loss on extinguishment of debt, net
Net income before income / loss from equity method investments and income taxes
(Loss) income from equity method investments
Net income attributable to non-controlling interest
Net income attributable to stockholders
Net income per share – basic
Net income per share – diluted
Weighted average number of shares outstanding – basic
Weighted average number of shares outstanding – diluted
Adjusted EBITDA For the three months ended March 31, 2022 (Unaudited, in thousands of U.S. dollars)
Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered in isolation or as an alternative to income/(loss) from operations, net income/(loss), cash flow from operating activities or any other measure of performance or liquidity derived in accordance with GAAP. We believe this non-GAAP measure, as we have defined it, offers a useful supplemental view of the overall operation of our business in evaluating the effectiveness of our ongoing operating performance in a manner that is consistent with metrics used for management’s evaluation of the Company’s overall performance and to compensate employees. We believe that Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation, and amortization which vary substantially from company to company depending on capital structure, the method by which assets were acquired and depreciation policies. Further, we exclude certain items from our SG&A not otherwise indicative of ongoing operating performance.
We calculate Adjusted EBITDA as net income, plus transaction and integration costs, contract termination charges and loss on mitigations sales, depreciation and amortization, interest expense (net of interest income), other (income), net, loss on extinguishment of debt, changes in fair value of non-hedge derivative instruments and contingent consideration, tax expense, and adjusting for certain items from our SG&A not otherwise indicative of ongoing operating performance, including non-cash share-based compensation and severance expense, non-capitalizable development expenses, cost to pursue new business opportunities and expenses associated with changes to our corporate structure, plus our pro rata share of Adjusted EBITDA from unconsolidated entities, less the impact of equity in earnings (losses) of unconsolidated entities.
Adjusted EBITDA is mathematically equivalent to our Total Segment Operating Margin, as reported in the segment disclosures within our financial statements, minus Core SG&A, including our pro rata share of such expenses of unconsolidated entities. Core SG&A is defined as total SG&A adjusted for non-cash share-based compensation and severance expense, non-capitalizable development expenses, cost of exploring new business opportunities and expenses associated with changes to our corporate structure. Core SG&A excludes certain items from our SG&A not otherwise indicative of ongoing operating performance.
The principal limitation of this non-GAAP measure is that it excludes significant expenses and income that are required by GAAP to be recorded in our financial statements. Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measure to our GAAP net income/(loss), and not to rely on any single financial measure to evaluate our business. Adjusted EBITDA does not have a standardized meaning, and different companies may use different Adjusted EBITDA definitions. Therefore, Adjusted EBITDA may not be necessarily comparable to similarly titled measures reported by other companies. Moreover, our definition of Adjusted EBITDA may not necessarily be the same as those we use for purposes of establishing covenant compliance under our financing agreements or for other purposes. Adjusted EBITDA should not be construed as alternatives to net income (loss) and diluted earnings (loss) per share attributable to New Fortress Energy, which are determined in accordance with GAAP.
The following table sets forth a reconciliation of net income to Adjusted EBITDA for the 3 months ended March, 31, 2021, December 31, 2021 and March 31, 2022:
Less: Core SG&A (see definition above)
Less: Pro rata share Core SG&A from unconsolidated entities
Add: Interest expense (net of interest income)
Add: SG&A items excluded from Core SG&A (see definition above)
Add: Transaction and integration costs
Add: Changes in fair value of non-hedge derivative instruments and contingent consideration
Add: Loss on extinguishment of debt, net
Add: Pro rata share of Adjusted EBITDA from unconsolidated entities(1)
Less: Loss (income) from equity method investments
Includes the Company’s effective share of Adjusted EBITDA of CELSEPAR of $24,173 and $30,207 for the three months ended December 31, 2021 and March 31, 2022 respectively, and the Company’s effective share of the Adjusted EBITDA of Hilli LLC of $20,573 and $20,291 for the three months ended December 31, 2021 and March 31, 2022, respectively. We acquired our investments in CELSEPAR and Hilli in the Mergers in the second quarter of 2021, and accordingly, there is no impact to Adjusted EBITDA in the first quarter of 2021 from these investments.
Segment Operating Margin (Unaudited, in thousands of U.S. dollars)
Performance of our two segments, Terminals and Infrastructure and Ships, is evaluated based on Segment Operating Margin. Segment Operating Margin reconciles to Consolidated Segment Operating Margin as reflected below, which is a non-GAAP measure. We define Consolidated Segment Operating Margin as GAAP net income (loss), adjusted for selling, general and administrative expense, transaction and integration costs, contract termination charges and loss on mitigation sales, depreciation and amortization, interest expense, other (income) expense, loss on extinguishment of debt, net, income from equity method investments and tax expense. Consolidated Segment Operating Margin is mathematically equivalent to Revenue minus Cost of sales minus Operations and maintenance minus Vessel operating expenses, each as reported in our financial statements.
(Income) from equity method investments
Terminals and Infrastructure includes the Company's effective share of revenues, expenses and operating margin attributable to 50% ownership of CELSEPAR. The earnings attributable to the investment of $36,680 for the three months ended March 31, 2022 are reported in (loss) income from equity method investments in the consolidated statements of operations and comprehensive income (loss). Terminals and Infrastructure does not include the unrealized mark-to-market gain on derivative instruments of $2,492 for the three months ended March 31, 2022 reported in Cost of sales.
Ships includes the Company's effective share of revenues, expenses and operating margin attributable to 50% ownership of the Hilli Common Units. The earnings attributable to the investment of $13,555 for the three months ended March 31, 2022 are reported in (loss) income from equity method investments in the condensed consolidated statements of operations and comprehensive income (loss).
Consolidation and Other adjusts for the inclusion of the effective share of revenues, expenses and operating margin attributable to 50% ownership of CELSEPAR and Hilli Common Units in our segment measure and exclusion of the unrealized mark-to-market gain or loss on derivative instruments.
Loss from extinguishment of debt
Loss from equity method investments
Terminals and Infrastructure includes the Company's effective share of revenues, expenses and operating margin attributable to 50% ownership of CELSEPAR. The losses attributable to the investment of $18,580 for the three months ended December 31, 2021 are reported in (loss) income from equity method investments on the condensed consolidated statements of operations and comprehensive income (loss). Terminals and Infrastructure does not include the unrealized mark-to-market loss on derivative instruments of $472 for the three months ended December 31, 2021 reported in Cost of sales.
Ships includes the Company's effective share of revenues, expenses and operating margin attributable to 50% ownership of the Hilli Common Units. The earnings attributable to the investment of $10,065 for the three months ended December 31, 2021 are reported in (loss) income from equity method investments on the condensed consolidated statements of operations and comprehensive income (loss).
Consolidation and Other adjusts for the inclusion of the effective share of revenues, expenses and operating margin attributable to 50% ownership of CELSEPAR and Hilli Common Units in our segment measure and exclusion of the unrealized mark-to-market gain or loss on derivative instruments.
Loss from equity method investments
Condensed Consolidated Balance Sheets As of March 31, 2022 and December 31, 2021 (Unaudited, in thousands of U.S. dollars, except share and per share amounts)
Receivables, net of allowances of $164 and $164, respectively
Prepaid expenses and other current assets, net
Property, plant and equipment, net
Current portion of long-term debt
Class A common stock, $0.01 par value, 750.0 million shares authorized, 207.5 million issued and outstanding as of March 31, 2022; 206.9 million issued and outstanding as of December 31, 2021
Accumulated other comprehensive income (loss)
Total stockholders' equity attributable to NFE
Total liabilities and stockholders' equity
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the three months ended March 31, 2022 and 2021 (Unaudited, in thousands of U.S. dollars, except share and per share amounts)
Net income (loss) before income from equity method investments and income taxes
Income from equity method investments
Net (income) loss attributable to non-controlling interest
Net income (loss) attributable to stockholders
Net income (loss) per share – basic
Net income (loss) per share – diluted
Weighted average number of shares outstanding – basic
Weighted average number of shares outstanding – diluted
Comprehensive loss (income) attributable to non-controlling interest
Comprehensive income (loss) attributable to stockholders
Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2022 and 2021 (Unaudited, in thousands of U.S. dollars)
Cash flows from operating activities
Amortization of deferred financing costs and debt guarantee, net
(Earnings) of equity method investees
Dividends received from equity method investees
Change in market value of derivatives
Changes in operating assets and liabilities, net of acquisitions:
Increase (Decrease) in accounts payable/accrued liabilities
Increase in amounts due to affiliates
Net cash provided by (used in) operating activities
Cash flows from investing activities
Entities acquired in asset acquisitions, net of cash acquired
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from borrowings of debt
Payment of deferred financing costs
Payments related to tax withholdings for share-based compensation
Net cash provided by financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Net (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash – beginning of period
Cash, cash equivalents and restricted cash – end of period
Supplemental disclosure of non-cash investing and financing activities:
Changes in accounts payable and accrued liabilities associated with construction in progress and property, plant and equipment additions
Liabilities associated with consideration paid for entities acquired in asset acquisitions
IR: Brett Magill bmagill@newfortressenergy.com Media: jsuski@newfortressenergy.com (516) 268-7403
IR: Brett Magill bmagill@newfortressenergy.com Media: jsuski@newfortressenergy.com (516) 268-7403