New Fortress Energy Announces Third Quarter 2022 Results
Summary Highlights
-
Pleased to report Q3 2022 Adjusted EBITDA(1) of
$291 million and$1.17 billion over the trailing twelve months endedSeptember 30, 2022 . NFE's net income for Q3 2022 and trailing twelve months was$56 million and$271 million , respectively -
Adjusted EPS(1) for the period was
$0.41 per share on a fully diluted basis, or EPS of$0.29 per share when including a non-cash impairment charge of$24 million resulting from an asset sale(2) announced in Q2 and completed in Q4 2022 -
We are on track to achieve our Illustrative Adjusted EBITDA Goal(3) of
~$1.1 billion for 2022-
Recently announced increase of 2023 Illustrative Adjusted EBITDA Goal(3) to
~$2 .5+ billion (from~$1 .5+ billion), and Illustrative Adjusted EBITDA Goals(3) of ~$4+ billion and ~$5+ billion for 2024 and 2025, respectively - Increase in 2023 earnings goals driven primarily by expected Deployment(4) of FLNG 1 in the first half of 2023, as well as higher expected operating margins and continued LNG portfolio optimization
-
Recently announced increase of 2023 Illustrative Adjusted EBITDA Goal(3) to
Fast LNG
-
Construction of our Fast LNG units is progressing rapidly with the first FLNG unit expected to achieve Mechanical Completion(5) in
March 2023 and commence Operations(4) by mid-2023 - Our Fast LNG units represent more than half of the world’s expected incremental LNG supply in 2023-2024, and we expect will be utilized in the near term to address Europe’s energy security issues
- We expect our five Fast LNG units under Development(6) to add approximately 7+ mtpa of new liquefaction capacity by the end of 2024 for a total LNG supply portfolio of approximately 9.5 mtpa
-
We signed binding agreements(7) with CFE on
November 3 inMexico City for a new FLNG hub atAltamira (originally announcedJuly 5 ) - We are selling our 135 MW La Paz power plant to CFE(7) for approximately $180mm
-
We are extending and expanding our gas supply agreement(7) with CFE in
Baja California Sur for ten years with improved pricing -
We finalized our partnership terms(8) with
Pemex to jointly develop the Lakach deepwater natural gas field and to deploy a Fast LNG unit to that location
Balance Sheet
-
Over the past two quarters, we simplified our capital structure, securing more than
$2.0 billion of internally generated liquidity to fund(9) our Fast LNG program -
We closed the sale of CELSE(2), the owner of the Sergipe Power Plant and Facility in
Brazil , and closed the transaction for Energos Infrastructure, our joint venture with Apollo in which NFE holds long-term charters for ten LNG vessels(10)
Terminals
- Our commitment to our customers at our downstream terminals remains robust, and we progressed several projects during the quarter
-
The Eems Energy Terminal inThe Netherlands commenced Operations(4) in September utilizing our FSRU Energos Igloo -
We expect the
Eems Energy Terminal to increase LNG capacity in the near-term with NFE as a potential new capacity holder of re-gas slots -
We are still on schedule to Complete(4) our Barcarena and
Santa Catarina terminal developments this year, and we are now preparing to commence Operations(4) in 2023 -
We advanced pre-Development(6) activities for our
Ireland terminal, with plans for a 600 MW power plant, and expect to receive relevant permits by year-end 2022
Hydrogen
- We continue to progress Development(6) activities in ZERO, our pure-play clean hydrogen business, with a plan to separately capitalize and a clear path for expansion
-
The Inflation Reduction Act of 2022 (“IRA”)(11) represents the largest climate investment in
U.S. history and is expected to drive $4+ trillion in capital investment inU.S. energy infrastructure over the next ten years -
The IRA(11) includes a
$3 /kg tax credit for the production of clean hydrogen, and we believe theU.S. is poised to become the leading venue in the world for industrial-scale clean hydrogen -
We have commenced construction(6) on our first hydrogen plant in
Beaumont (120 MW, ~50 tpd), an industrial hub inTexas , and have several other projects in various stages of development
-
NFE’s Board of Directors approved a dividend of
$0.10 per share, with a record date ofDecember 7, 2022 and a payment date ofDecember 20, 2022
Financial Highlights |
||||||
|
Three Months Ended |
|||||
(in millions) |
|
|
|
|||
Revenues |
$ |
584.9 |
|
|
$ |
731.9 |
Net (loss) income |
$ |
(178.4 |
) |
|
$ |
56.2 |
Adjusted net income |
$ |
145.7 |
|
|
$ |
85.6 |
Terminals and Infrastructure Segment Operating Margin(12) |
$ |
237.7 |
|
|
$ |
251.5 |
Ships Segment Operating Margin(12) |
$ |
89.7 |
|
|
$ |
87.9 |
Total Segment Operating Margin(12) |
$ |
327.4 |
|
|
$ |
339.3 |
Adjusted EBITDA(1) |
$ |
283.5 |
|
|
$ |
290.7 |
Please refer to our Q3 2022 Investor Presentation (the “Presentation”) for further information about the following terms: | ||
1) |
“Adjusted EBITDA” and "Adjusted EPS" see definition and reconciliation of these non-GAAP measures in the exhibits to this press release. |
|
2) |
Refers to the sale by NFE and Ebrasil Energia Ltda. and its shareholders (“Ebrasil”) to Eneva S.A. (“Eneva”) of 100% of the equity interests of the |
|
3) |
“Illustrative Adjusted EBITDA Goal” is based on the "Illustrative Total Segment Operating Margin Goal" less illustrative Core SGA assumed to be at $180mm in 2022 and $192mm for all periods 2023 onward including the pro rata share of Core SG&A from unconsolidated entities. “Illustrative Total Segment Operating Margin Goal,” or “Illustrative Future Goal” means our goal for Total Segment Operating Margin under certain illustrative conditions. Please refer to this explanation for all uses of this term. This goal reflects the volumes of LNG that it is our goal to sell under binding contracts multiplied by the average price per unit at which we expect to price LNG deliveries, including both fuel sales and capacity charges or other fixed fees, less the cost per unit at which we expect to purchase or produce and deliver such LNG or natural gas, including the cost to (i) purchase natural gas, liquefy it, and transport it to one of our terminals or purchase LNG in strip cargos or on the spot market, (ii) transfer the LNG into an appropriate ship and transport it to our terminals or facilities, (iii) deliver the LNG, regasify it to natural gas and deliver it to our customers or our power plants and (iv) maintain and operate our terminals, facilities and power plants. For vessels chartered to third parties, this illustration reflects the revenue from ships chartered to third parties, capacity and tolling arrangements, and other fixed fees, less the cost to operate and maintain each ship, in each case based on contracted amounts for ship charters, capacity and tolling fees, and industry standard costs for operation and maintenance. There can be no assurance that the costs of purchasing or producing LNG, transporting the LNG and maintaining and operating our terminals and facilities will result in the Illustrative Total Segment Operating Margin Goal reflected. For the purpose of this press release, we have assumed an average Total Segment Operating Margin between |
|
4) |
“Online”, “Operational”, "Operating", "Completion", "Completed", “Deployment” or similar statuses (either capitalized or lower case) with respect to a particular project means we expect gas to be made available within sixty (60) days, gas has been made available to the relevant project, or that the relevant project is in full commercial operations. Where gas is going to be made available or has been made available but full commercial operations have not yet begun, full commercial operations will occur later than, and may occur substantially later than, our reported Operational, Completion or Deployment date, and we may not generate any revenue until full commercial operations has begun. We cannot assure you if or when such projects will reach full commercial operations. Actual results could differ materially from the illustrations reflected in this press release and there can be no assurance we will achieve our goals. Our ability to export liquefied natural gas depends on our ability to obtain export and other permits from |
|
5) |
“Mechanical Completion” or similar statuses with respect to a particular project means we have completed construction and certain subsystems are ready to be handed over to the commissioning team. There may be several mechanical completion milestones defined for the various subsystems of a project. Therefore, no assurance can be given that we will be able to complete a project and begin operations even if a project has reached mechanical completion. |
|
6) |
“Under Construction”, “In Construction”, “Under Construction”, “Development,” “In Development” or similar statuses means that we have taken steps and invested money to develop a facility, including execution of agreements for the development of the project (subject, in certain cases, to satisfaction of conditions precedent), procuring land rights and entitlements, negotiating or signing construction contracts, and undertaking active engineering, procurement and construction work. Our development projects are in various phases of progress, and there can be no assurance that we will continue progress on each development as we expect or that each development will be Completed or enter full commercial operations. There can be no assurance that we will be able to enter into the contracts required for the development of these facilities on commercially favorable terms or at all. If we are unable to enter into favorable contracts or to obtain the necessary regulatory and land use approvals on favorable terms, we may not be able to construct and operate these assets as expected, or at all. Additionally, the construction of facilities is inherently subject to the risks of cost overruns and delays, and these risks of delay are exacerbated by the COVID-19 pandemic. If we are unable to construct, commission and operate all of our facilities as expected, or, when and if constructed, they do not accomplish our goals, or if we experience delays or cost overruns in construction, our business, operating results, cash flows and liquidity could be materially and adversely affected. |
|
7) |
Refers to the binding short-form agreements with Comisión Federal de Electricidad (“CFE”) related to the (i) expansion and extension of NFE’s supply of natural gas to multiple CFE power generation facilities in |
|
8) |
Refers to discussions with Petróleos |
|
9) |
Represents management’s expectations regarding the funding of the committed expenditures reflected and the estimated expenditures. The estimated expenditures, including those related to project costs, are not based on generally accepted accounting principles and should not be relied upon for any reason. There is no guarantee that we will reach our goals for funding the estimated expenditures and actual results may differ from our expectations. |
|
10) |
Refers to sale of 11 liquefied natural gas (“LNG”) infrastructure vessels consisting of Floating Storage and Regasification assets, Floating Storage vessels and LNG carriers owned by NFE to a newly formed joint venture amed Energos Infrastructure (“Energos”), owned approximately 80% by Apollo-managed funds and 20% by NFE. Closing of this transaction occurred on |
|
11) |
The Inflation Reduction Act was signed into law on |
|
12) |
“Total Segment Operating Margin” is the total of our Terminals and Infrastructure Segment Operating Margin and Ships Segment Operating Margin. "Terminals and Infrastructure Segment Operating Margin" includes our effective share of revenue, expenses and operating margin attributable to our 50% ownership of Centrais Elétricas de Sergipe Participações S.A. (“CELSEPAR”). "Ships Segment Operating Margin" includes our effective share of revenue, expenses and operating margin attributable to our ownership of 50% of the common units of |
Additional Information
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 and Quarterly Report on Form 10-Q, which is available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
Management will host a conference call on
A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.newfortressenergy.com within the "Investors" tab under “Events & Presentations.” 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 at the same website location shortly after the conclusion of the live call.
About
Cautionary Statement Concerning Forward-Looking Statements
This press release contains certain statements and information that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than historical information are forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance or our projected business results. 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. Forward looking statements include: illustrative financial metrics and other similar metrics, including goals, expected financial growth, margins and portfolio optimization, among others; the successful development and deployment of our Fast LNG liquefaction technology on time and within the expected specifications and design; operation of Fast LNG facilities expectations, including volume production, capacity, sales and reserves of LNG; expectations related to future LNG and energy industries, as well as the development, construction and operation of new facilities; the execution of definitive documents and their related terms and conditions, including without limitation the sales price of the
Exhibits – Financial Statements
Condensed Consolidated Statements of Operations |
|||||||
For the three months ended |
|||||||
(Unaudited, in thousands of |
|||||||
|
For the Three Months Ended |
||||||
|
|
|
|
||||
Revenues |
|
|
|
||||
Operating revenue |
$ |
497,240 |
|
|
$ |
632,684 |
|
Vessel charter revenue |
|
75,134 |
|
|
|
92,860 |
|
Other revenue |
|
12,481 |
|
|
|
6,386 |
|
Total revenues |
|
584,855 |
|
|
|
731,930 |
|
|
|
|
|
||||
Operating expenses |
|
|
|
||||
Cost of sales |
|
272,401 |
|
|
|
393,830 |
|
Vessel operating expenses |
|
18,628 |
|
|
|
20,318 |
|
Operations and maintenance |
|
20,490 |
|
|
|
22,033 |
|
Selling, general and administrative |
|
50,310 |
|
|
|
67,601 |
|
Transaction and integration costs |
|
4,866 |
|
|
|
5,620 |
|
Depreciation and amortization |
|
36,356 |
|
|
|
35,793 |
|
Asset impairment expense |
|
48,109 |
|
|
|
— |
|
Total operating expenses |
|
451,160 |
|
|
|
545,195 |
|
Operating income |
|
133,695 |
|
|
|
186,735 |
|
Interest expense |
|
47,840 |
|
|
|
63,588 |
|
Other (income) expense, net |
|
(22,102 |
) |
|
|
10,214 |
|
Loss on extinguishment of debt, net |
|
— |
|
|
|
14,997 |
|
Net income before income (loss) from equity method investments and income taxes |
|
107,957 |
|
|
|
97,936 |
|
Loss from equity method investments |
|
(372,927 |
) |
|
|
(31,734 |
) |
Tax (benefit) provision |
|
(86,539 |
) |
|
|
9,971 |
|
Net income (loss) |
|
(178,431 |
) |
|
|
56,231 |
|
Net income (loss) attributable to non-controlling interest |
|
8,666 |
|
|
|
5,617 |
|
Net income (loss) attributable to stockholders |
$ |
(169,765 |
) |
|
$ |
61,848 |
|
|
|
|
|
||||
Net income (loss) per share – basic |
$ |
(0.81 |
) |
|
$ |
0.30 |
|
Net income (loss) per share – diluted |
$ |
(0.81 |
) |
|
$ |
0.29 |
|
|
|
|
|
||||
Weighted average number of shares outstanding – basic |
|
209,669,188 |
|
|
|
209,629,936 |
|
Weighted average number of shares outstanding – diluted |
|
209,669,188 |
|
|
|
209,800,427 |
|
Adjusted EBITDA
For the three months ended
(Unaudited, in thousands of
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, asset impairment expense, interest expense, net, 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
The following table sets forth a reconciliation of net (loss) income to Adjusted EBITDA for the three months ended
(in thousands) |
|
Three Months
|
|
Three Months
|
|
Three Months
|
|
Three Months
|
|
Twelve Months
|
||||||||||
Total Segment Operating Margin |
|
$ |
373,150 |
|
|
$ |
300,083 |
|
|
$ |
327,448 |
|
|
$ |
339,330 |
|
|
$ |
1,340,011 |
|
Less: Core SG&A (see definition above) |
|
|
38,033 |
|
|
|
40,960 |
|
|
|
42,040 |
|
|
|
47,290 |
|
|
|
168,323 |
|
Less: Pro rata share Core SG&A from unconsolidated entities |
|
|
1,110 |
|
|
|
1,390 |
|
|
|
1,914 |
|
|
|
1,293 |
|
|
|
5,707 |
|
Adjusted EBITDA |
|
$ |
334,007 |
|
|
$ |
257,733 |
|
|
$ |
283,494 |
|
|
$ |
290,747 |
|
|
$ |
1,165,981 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
|
$ |
151,723 |
|
|
$ |
241,181 |
|
|
$ |
(178,431 |
) |
|
$ |
56,231 |
|
|
$ |
270,704 |
|
Add: Interest expense, net |
|
|
46,567 |
|
|
|
44,916 |
|
|
|
47,840 |
|
|
|
63,588 |
|
|
|
202,911 |
|
Add: Tax provision (benefit) |
|
|
5,403 |
|
|
|
(49,681 |
) |
|
|
(86,539 |
) |
|
|
9,971 |
|
|
|
(120,846 |
) |
Add: Depreciation and amortization |
|
|
30,297 |
|
|
|
34,290 |
|
|
|
36,356 |
|
|
|
35,793 |
|
|
|
136,736 |
|
Add: Asset impairment expense |
|
|
— |
|
|
|
— |
|
|
|
48,109 |
|
|
|
— |
|
|
|
48,109 |
|
Add: SG&A items excluded from Core SG&A (see definition above) |
|
|
36,894 |
|
|
|
7,081 |
|
|
|
8,270 |
|
|
|
20,311 |
|
|
|
72,556 |
|
Add: Transaction and integration costs |
|
|
2,107 |
|
|
|
1,901 |
|
|
|
4,866 |
|
|
|
5,620 |
|
|
|
14,494 |
|
Add: Other (income) expense, net |
|
|
(3,692 |
) |
|
|
(19,725 |
) |
|
|
(22,102 |
) |
|
|
10,214 |
|
|
|
(35,305 |
) |
Add: Changes in fair value of non-hedge derivative instruments and contingent consideration |
|
|
472 |
|
|
|
(2,492 |
) |
|
|
2,247 |
|
|
|
(6,868 |
) |
|
|
(6,641 |
) |
Add: Loss on extinguishment of debt, net |
|
|
10,975 |
|
|
|
— |
|
|
|
— |
|
|
|
14,997 |
|
|
|
25,972 |
|
Add: Pro rata share of Adjusted EBITDA from unconsolidated entities(1) |
|
|
44,746 |
|
|
|
50,497 |
|
|
|
49,951 |
|
|
|
49,156 |
|
|
|
194,350 |
|
Less: Loss (income) from equity method investments |
|
|
8,515 |
|
|
|
(50,235 |
) |
|
|
372,927 |
|
|
|
31,734 |
|
|
|
362,941 |
|
Adjusted EBITDA |
|
$ |
334,007 |
|
|
$ |
257,733 |
|
|
$ |
283,494 |
|
|
$ |
290,747 |
|
|
$ |
1,165,981 |
(1) |
Includes the Company’s effective share of Adjusted EBITDA of CELSEPAR of |
Segment Operating Margin
(Unaudited, in thousands of
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, asset impairment expense, interest expense, other (income) expense, loss on extinguishment of debt, net, (loss) income from equity method investments and tax (benefit) 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.
Three Months Ended |
|||||||||||||||
(in thousands of $) |
Terminals and
|
|
Ships ⁽²⁾ |
|
Total
|
|
Consolidation
|
|
Consolidated |
||||||
Segment Operating Margin |
$ |
251,469 |
|
$ |
87,861 |
|
$ |
339,330 |
|
$ |
(43,581 |
) |
|
$ |
295,749 |
Less: |
|
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
67,601 |
|||||
Transaction and integration costs |
|
|
|
|
|
|
|
|
|
5,620 |
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
35,793 |
|||||
Asset impairment expense |
|
|
|
|
|
|
|
|
|
— |
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
63,588 |
|||||
Other expense, net |
|
|
|
|
|
|
|
|
|
10,214 |
|||||
Loss from extinguishment of debt |
|
|
|
|
|
|
|
|
|
14,997 |
|||||
Loss from equity method investments |
|
|
|
|
|
|
|
|
|
31,734 |
|||||
Tax provision |
|
|
|
|
|
|
|
|
|
9,971 |
|||||
Net income |
|
|
|
|
|
|
|
|
|
56,231 |
(1) |
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 |
|
(2) |
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 |
|
(3) |
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. |
Three Months Ended |
||||||||||||||||
(in thousands of $) |
Terminals and
|
|
Ships ⁽²⁾ |
|
Total
|
|
Consolidation
|
|
Consolidated |
|||||||
Segment Operating Margin |
$ |
237,712 |
|
$ |
89,736 |
|
$ |
327,448 |
|
$ |
(54,112 |
) |
|
$ |
273,336 |
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
50,310 |
|
|||||
Transaction and integration costs |
|
|
|
|
|
|
|
|
|
4,866 |
|
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
36,356 |
|
|||||
Asset impairment expense |
|
|
|
|
|
|
|
|
|
48,109 |
|
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
47,840 |
|
|||||
Other (income), net |
|
|
|
|
|
|
|
|
|
(22,102 |
) |
|||||
Loss from equity method investments |
|
|
|
|
|
|
|
|
|
372,927 |
|
|||||
Tax (benefit) |
|
|
|
|
|
|
|
|
|
(86,539 |
) |
|||||
Net loss |
|
|
|
|
|
|
|
|
|
(178,431 |
) |
|||||
|
|
|
|
|
|
|
|
|
|
(1) |
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 |
|
(2) |
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 |
|
(3) |
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. |
Three Months Ended |
||||||||||||||||
(in thousands of $) |
Terminals and
|
|
Ships ⁽²⁾ |
|
Total
|
|
Consolidation
|
|
Consolidated |
|||||||
Segment Operating Margin |
$ |
211,083 |
|
$ |
89,000 |
|
$ |
300,083 |
|
$ |
(49,395 |
) |
|
$ |
250,688 |
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
48,041 |
|
|||||
Transaction and integration costs |
|
|
|
|
|
|
|
|
|
1,901 |
|
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
34,290 |
|
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
44,916 |
|
|||||
Other (income), net |
|
|
|
|
|
|
|
|
|
(19,725 |
) |
|||||
Loss from extinguishment of debt |
|
|
|
|
|
|
|
|
|
|||||||
(Income) from equity method investments |
|
|
|
|
|
|
|
|
|
(50,235 |
) |
|||||
Tax (benefit) |
|
|
|
|
|
|
|
|
|
(49,681 |
) |
|||||
Net income |
|
|
|
|
|
|
|
|
|
241,181 |
(1) |
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 |
|
(2) |
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 |
|
(3) |
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. |
Three Months Ended |
||||||||||||||||
(in thousands of $) |
Terminals and
|
|
Ships ⁽²⁾ |
|
Total
|
|
Consolidation
|
|
Consolidated |
|||||||
Segment Operating Margin |
$ |
278,354 |
|
$ |
94,796 |
|
$ |
373,150 |
|
$ |
(46,328 |
) |
|
$ |
326,822 |
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
74,927 |
|
|||||
Transaction and integration costs |
|
|
|
|
|
|
|
|
|
2,107 |
|
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
30,297 |
|
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
46,567 |
|
|||||
Other (income), net |
|
|
|
|
|
|
|
|
|
(3,692 |
) |
|||||
Loss from extinguishment of debt |
|
|
|
|
|
|
|
|
|
10,975 |
|
|||||
Loss from equity method investments |
|
|
|
|
|
|
|
|
|
8,515 |
|
|||||
Tax provision |
|
|
|
|
|
|
|
|
|
5,403 |
|
|||||
Net income |
|
|
|
|
|
|
|
|
|
151,723 |
(1) |
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 |
|
(2) |
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 |
|
(3) |
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. |
Adjusted Net Income and Adjusted Earnings per Share
(Unaudited, in thousands of
The following table sets forth a reconciliation between net income (loss) attributable to stockholders and earnings per share adjusted for non-cash impairment charges.
|
Three months ended
|
|
Three months ended
|
|||
Net income (loss) attributable to stockholders |
$ |
(169,765 |
) |
|
$ |
61,848 |
Non-cash impairment charges |
|
315,444 |
|
|
|
23,760 |
Adjusted net income |
|
145,679 |
|
|
|
85,608 |
|
|
|
|
|||
Weighted-average shares outstanding - diluted (QTD) |
|
209,669,188 |
|
|
|
209,800,427 |
|
|
|
|
|||
Adjusted earnings per share |
$ |
0.69 |
|
|
$ |
0.41 |
|
|
|
|
Condensed Consolidated Balance Sheets |
|||||||
As of |
|||||||
(Unaudited, in thousands of |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
364,313 |
|
|
$ |
187,509 |
|
Restricted cash |
|
24,204 |
|
|
|
68,561 |
|
Receivables, net of allowances of |
|
438,440 |
|
|
|
208,499 |
|
Inventory |
|
62,801 |
|
|
|
37,182 |
|
Prepaid expenses and other current assets, net |
|
154,798 |
|
|
|
83,115 |
|
Total current assets |
|
1,044,556 |
|
|
|
584,866 |
|
|
|
|
|
||||
Restricted cash |
|
2,581 |
|
|
|
7,960 |
|
Construction in progress |
|
1,835,289 |
|
|
|
1,043,883 |
|
Property, plant and equipment, net |
|
2,131,912 |
|
|
|
2,137,936 |
|
Equity method investments |
|
1,016,350 |
|
|
|
1,182,013 |
|
Right-of-use assets |
|
391,488 |
|
|
|
309,663 |
|
Intangible assets, net |
|
92,339 |
|
|
|
142,944 |
|
Finance leases, net |
|
5,573 |
|
|
|
602,675 |
|
|
|
778,488 |
|
|
|
760,135 |
|
Deferred tax assets, net |
|
4,750 |
|
|
|
5,999 |
|
Other non-current assets, net |
|
137,658 |
|
|
|
98,418 |
|
Total assets |
$ |
7,440,984 |
|
|
$ |
6,876,492 |
|
|
|
|
|
||||
Liabilities |
|
|
|
||||
Current liabilities |
|
|
|
||||
Current portion of long-term debt |
$ |
58,188 |
|
|
$ |
97,251 |
|
Accounts payable |
|
104,042 |
|
|
|
68,085 |
|
Accrued liabilities |
|
278,732 |
|
|
|
244,025 |
|
Current lease liabilities |
|
51,362 |
|
|
|
47,114 |
|
Other current liabilities |
|
78,670 |
|
|
|
106,036 |
|
Total current liabilities |
|
570,994 |
|
|
|
562,511 |
|
|
|
|
|
||||
Long-term debt |
|
4,397,099 |
|
|
|
3,757,879 |
|
Non-current lease liabilities |
|
317,268 |
|
|
|
234,060 |
|
Deferred tax liabilities, net |
|
101,107 |
|
|
|
269,513 |
|
Other long-term liabilities |
|
52,319 |
|
|
|
58,475 |
|
Total liabilities |
|
5,438,787 |
|
|
|
4,882,438 |
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity |
|
|
|
||||
Class A common stock, |
|
2,088 |
|
|
|
2,069 |
|
Additional paid-in capital |
|
1,801,719 |
|
|
|
1,923,990 |
|
Accumulated deficit |
|
(2,047 |
) |
|
|
(132,399 |
) |
Accumulated other comprehensive income (loss) |
|
45,613 |
|
|
|
(2,085 |
) |
Total stockholders' equity attributable to NFE |
|
1,847,373 |
|
|
|
1,791,575 |
|
Non-controlling interest |
|
154,824 |
|
|
|
202,479 |
|
Total stockholders' equity |
|
2,002,197 |
|
|
|
1,994,054 |
|
Total liabilities and stockholders' equity |
$ |
7,440,984 |
|
|
$ |
6,876,492 |
|
Condensed Consolidated Statements of Operations |
|||||||||||||||
For the three and nine months ended |
|||||||||||||||
(Unaudited, in thousands of |
|||||||||||||||
|
Three Months Ended September
|
|
Nine Months Ended September
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Operating revenue |
$ |
632,684 |
|
|
$ |
188,389 |
|
|
$ |
1,529,999 |
|
|
$ |
382,421 |
|
Vessel charter revenue |
|
92,860 |
|
|
|
78,656 |
|
|
|
260,414 |
|
|
|
143,217 |
|
Other revenue |
|
6,386 |
|
|
|
37,611 |
|
|
|
31,490 |
|
|
|
148,541 |
|
Total revenues |
|
731,930 |
|
|
|
304,656 |
|
|
|
1,821,903 |
|
|
|
674,179 |
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses |
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
393,830 |
|
|
|
135,432 |
|
|
|
874,529 |
|
|
|
333,533 |
|
Vessel operating expenses |
|
20,318 |
|
|
|
15,301 |
|
|
|
61,910 |
|
|
|
30,701 |
|
Operations and maintenance |
|
22,033 |
|
|
|
20,144 |
|
|
|
65,691 |
|
|
|
54,960 |
|
Selling, general and administrative |
|
67,601 |
|
|
|
46,802 |
|
|
|
165,952 |
|
|
|
124,954 |
|
Transaction and integration costs |
|
5,620 |
|
|
|
1,848 |
|
|
|
12,387 |
|
|
|
42,564 |
|
Contract termination charges and loss on mitigation sales |
— |
— |
— |
— |
|||||||||||
Depreciation and amortization |
|
35,793 |
|
|
|
31,194 |
|
|
|
106,439 |
|
|
|
68,080 |
|
Asset impairment expense |
|
— |
|
|
|
— |
|
|
|
48,109 |
|
|
|
— |
|
Total operating expenses |
|
545,195 |
|
|
|
250,721 |
|
|
|
1,335,017 |
|
|
|
654,792 |
|
Operating income (loss) |
|
186,735 |
|
|
|
53,935 |
|
|
|
486,886 |
|
|
|
19,387 |
|
Interest expense |
|
63,588 |
|
|
|
57,595 |
|
|
|
156,344 |
|
|
|
107,757 |
|
Other expense (income), net |
|
10,214 |
|
|
|
(5,400 |
) |
|
|
(31,613 |
) |
|
|
(13,458 |
) |
Loss on extinguishment of debt |
|
14,997 |
|
|
|
— |
|
|
|
14,997 |
|
|
|
— |
|
Net income (loss) before (loss) income from equity method investments and income taxes |
|
97,936 |
|
|
|
1,740 |
|
|
|
347,158 |
|
|
|
(74,912 |
) |
(Loss) income from equity method investments |
|
(31,734 |
) |
|
|
(15,983 |
) |
|
|
(354,426 |
) |
|
|
22,958 |
|
Tax provision (benefit) |
|
9,971 |
|
|
|
3,526 |
|
|
|
(126,249 |
) |
|
|
7,058 |
|
Net income (loss) |
|
56,231 |
|
|
|
(17,769 |
) |
|
|
118,981 |
|
|
|
(59,012 |
) |
Net income (loss) attributable to non-controlling interest |
|
5,617 |
|
|
|
7,963 |
|
|
|
11,371 |
|
|
|
5,259 |
|
Net income (loss) attributable to stockholders |
$ |
61,848 |
|
|
$ |
(9,806 |
) |
|
$ |
130,352 |
|
|
$ |
(53,753 |
) |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share – basic |
$ |
0.30 |
|
|
$ |
(0.05 |
) |
|
$ |
0.62 |
|
|
$ |
(0.27 |
) |
Net income (loss) per share – diluted |
$ |
0.29 |
|
|
$ |
(0.05 |
) |
|
$ |
0.62 |
|
|
$ |
(0.27 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding – basic |
|
209,629,936 |
|
|
|
207,497,013 |
|
|
|
209,749,139 |
|
|
|
195,626,564 |
|
Weighted average number of shares outstanding – diluted |
|
209,800,427 |
|
|
|
207,497,013 |
|
|
|
209,869,058 |
|
|
|
195,626,564 |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows |
|||||||
For the nine months ended |
|||||||
(Unaudited, in thousands of |
|||||||
|
Nine Months Ended |
||||||
|
2022 |
|
2021 |
||||
Cash flows from operating activities |
|
|
|
||||
Net income (loss) |
$ |
118,981 |
|
|
$ |
(59,012 |
) |
Adjustments for: |
|
|
|
||||
Amortization of deferred financing costs and debt guarantee, net |
|
3,201 |
|
|
|
9,503 |
|
Depreciation and amortization |
|
107,185 |
|
|
|
68,971 |
|
Loss (earnings) of equity method investees |
|
354,426 |
|
|
|
(22,958 |
) |
Drydocking expenditure |
|
(15,028 |
) |
|
|
— |
|
Dividends received from equity method investees |
|
23,195 |
|
|
|
14,259 |
|
Change in market value of derivatives |
|
(6,700 |
) |
|
|
(4,955 |
) |
Deferred taxes |
|
(203,026 |
) |
|
|
(4,280 |
) |
Share-based compensation |
|
14,655 |
|
|
|
4,945 |
|
Asset impairment expense |
|
48,109 |
|
|
|
— |
|
Earnings recognized from vessels chartered to third parties by |
|
(14,341 |
) |
|
|
— |
|
Loss on extinguishment of debt |
|
14,997 |
|
|
|
— |
|
Loss on sale of net investment in lease |
|
11,592 |
|
|
|
— |
|
Other |
|
12,636 |
|
|
|
(5,735 |
) |
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
||||
(Increase) in receivables |
|
(287,748 |
) |
|
|
(75,633 |
) |
(Increase) in inventories |
|
(28,078 |
) |
|
|
(56,172 |
) |
(Increase) decrease in other assets |
|
(93,329 |
) |
|
|
25,500 |
|
Decrease in right-of-use assets |
|
51,265 |
|
|
|
3,149 |
|
Increase (decrease) in accounts payable/accrued liabilities |
|
27,659 |
|
|
|
(2,530 |
) |
(Decrease) in amounts due to affiliates |
|
(3,220 |
) |
|
|
(2,070 |
) |
(Decrease) in lease liabilities |
|
(47,237 |
) |
|
|
(2,510 |
) |
Decrease (increase) in other liabilities |
|
1,911 |
|
|
|
(30,159 |
) |
Net cash provided by (used in) operating activities |
|
91,105 |
|
|
|
(139,687 |
) |
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
||||
Capital expenditures |
|
(787,166 |
) |
|
|
(430,549 |
) |
Cash paid for business combinations, net of cash acquired |
|
— |
|
|
|
(1,586,042 |
) |
Entities acquired in asset acquisitions, net of cash acquired |
|
— |
|
|
|
(8,817 |
) |
Proceeds from the sale of net investment in lease |
|
593,000 |
|
|
|
— |
|
Other investing activities |
|
(1,794 |
) |
|
|
(5,750 |
) |
Net cash (used in) investing activities |
|
(195,960 |
) |
|
|
(2,031,158 |
) |
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
||||
Proceeds from borrowings of debt |
|
1,932,020 |
|
|
|
2,234,650 |
|
Payment of deferred financing costs |
|
(16,093 |
) |
|
|
(35,846 |
) |
Repayment of debt |
|
(1,518,471 |
) |
|
|
(229,887 |
) |
Payments related to tax withholdings for share-based compensation |
|
(72,597 |
) |
|
|
(29,717 |
) |
Payment of dividends |
|
(75,149 |
) |
|
|
(65,051 |
) |
Net cash provided by financing activities |
|
249,710 |
|
|
|
1,874,149 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(4,896 |
) |
|
|
1,960 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
139,959 |
|
|
|
(294,736 |
) |
Cash, cash equivalents and restricted cash – beginning of period |
|
264,030 |
|
|
|
629,336 |
|
Cash, cash equivalents and restricted cash – end of period⁽¹⁾ |
$ |
403,989 |
|
|
$ |
334,600 |
|
|
|
|
|
||||
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 |
$ |
112,886 |
|
|
$ |
187,295 |
|
Liabilities associated with consideration paid for entities acquired in asset acquisitions |
|
— |
|
|
|
9,959 |
|
Consideration paid in shares for business combinations |
|
— |
|
|
|
1,400,784 |
|
Principal payments paid to |
|
(5,438 |
) |
|
|
— |
|
Investment in |
|
129,518 |
|
|
|
— |
|
Non-cash financing costs |
|
41,264 |
|
|
|
(1) |
Cash and cash equivalents includes |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221107006146/en/
Investors:
ir@newfortressenergy.com
Media:
press@newfortressenergy.com
(516) 268-7403
Source: