New Fortress Energy Inc. (Nasdaq: NFE) (“NFE” or the “Company”)
today reported its financial results for the second quarter of
2024.
Summary Highlights
- Adjusted EBITDA(1) of $120 million in the second quarter of
2024
- Second quarter results do not include $107 million of
contracted LNG sales during the quarter, which will be included in
Adjusted EBITDA and earnings in the second half of 2024
- Net loss of $87 million in the second quarter of 2024
- Adjusted EPS(2) of $(0.41) on a fully diluted basis in the
second quarter of 2024
- EPS of $(0.44) on a fully diluted basis in the second quarter
of 2024
- Funds from Operations per share(3) of $(0.23) on a fully
diluted basis in the second quarter of 2024
- Illustrative Adjusted EBITDA Goal(4) of $1.4-1.5 billion in the
full year 2024 and $1.3 billion in the full year 2025
- FLNG 1 project complete with First Cargo(5) expected in August
2024
“Our Adjusted EBITDA in the second quarter of $120 million was
well below our expectation of $275 million. This was largely the
result of delays in placing our FLNG 1 project into service, which
was originally expected to occur at the beginning of the second
quarter. As detailed in our earnings presentation, the cost of this
delay is approximately $150 million per quarter in lost operating
margin, which represents the vast majority of the Adjusted EBITDA
shortfall for the quarter.
“We are very pleased to report that FLNG 1 is now in service as
of July 19 and performing as expected. While we are disappointed in
the delay, we believe this project is by far the fastest LNG
facility ever built and positions the Company well to take
advantage of the current market for LNG.
“Our Adjusted EBITDA in the second quarter does not include $107
million of contracted LNG sales completed during the quarter, of
which $90 million has been received to date. These sales will be
reflected in Adjusted EBITDA and earnings in the second half of
this year. For the full calendar year 2024 and 2025, we are
forecasting Adjusted EBITDA of $1.4-1.5 billion, inclusive of the
expected resolution of our outstanding early termination claims on
our FEMA contracts, and $1.3 billion, respectively.
“We have a large and expanding business, with a broad and robust
portfolio and customers. While we are disappointed in the delay in
placing FLNG 1 into service, it is now operational and we are very
excited about the future of our business,” said Wes Edens, Chairman
and CEO of New Fortress Energy.
Financial Highlights
We generated Adjusted EBITDA(1) of $120 million in the second
quarter of 2024, the majority of which was generated by contracted
downstream assets. Adjusted EBITDA(1) in the second quarter of 2024
reflects the completed sale of the power plants that we developed
for FEMA in Puerto Rico and concurrent 80 TBtu island-wide gas
contract awarded in March 2024. These transformative transactions
pave the way for significant expansion of our business in Puerto
Rico, supporting expected growth in Adjusted EBITDA(1). Growth is
expected to further accelerate upon the completion of our Nicaragua
terminal and power asset in the fourth quarter of 2024 and our 2.2
GW power asset in Barcarena in 2025 and 2026.
We completed our initial Fast LNG asset located offshore
Altamira, Mexico, following the achievement of First LNG in July
2024. With a production capacity of 1.4 MTPA, or approximately 70
TBtus per annum, FLNG 1 completes the vertical integration of NFE’s
LNG portfolio and will play a pivotal role in supplying low-cost,
clean LNG to the Company’s downstream terminal customers with First
Cargo(5) expected in August 2024. The completion of FLNG 1 marks a
significant milestone for the Company, establishing itself as the
fastest large-scale LNG project ever developed and enabling
significant reductions in future capital expenditures.
On August 8, 2024, NFE’s Board of Directors approved a dividend
of $0.10 per share, with a record date of September 13, 2024 and a
payment date of September 27, 2024.
Financial Detail
Three Months Ended
(in millions)
June 30, 2023
March 31, 2024
June 30, 2024
Revenues
$
561.3
$
690.3
$
428.0
Net income (loss)
$
120.1
$
56.7
$
(86.9
)
Diluted EPS
$
0.58
$
0.26
$
(0.44
)
Adjusted net income (loss)(7)
$
119.2
$
138.4
$
(84.6
)
Adjusted EPS(2)
$
0.58
$
0.67
$
(0.41
)
Terminals and Infrastructure Segment
Operating Margin(8)
$
239.4
$
350.1
$
214.3
Ships Segment Operating Margin(8)
$
54.4
$
34.2
$
34.1
Total Segment Operating Margin(8)
$
293.8
$
384.3
$
248.4
Adjusted EBITDA(1)
$
246.5
$
340.1
$
120.2
The Company intends to refinance all its 6.75% senior secured
notes due September 2025 in the near term.
Please refer to our Q2 2024 Investor Presentation (the
“Presentation”) for further information about the following
terms:
1)“Adjusted EBITDA,” see definition and reconciliation of this
non-GAAP measure in the exhibits to this press release.
2) “Adjusted EPS” is not a measurement of financial performance
under GAAP and should not be considered in isolation or as an
alternative to any measure of performance or liquidity derived in
accordance with GAAP. We calculate Adjusted EPS as Adjusted Net
Income (Note 7 below) divided by the weighted average shares
outstanding on a fully diluted basis for the period indicated. We
believe this non-GAAP measure, as we have defined it, offers a
useful supplemental view of the overall evaluation of the Company
in a manner that is consistent with metrics used for management’s
evaluation of the Company’s overall performance. Adjusted EPS does
not have a standardized meaning, and different companies may use
different definitions. Therefore, this term may not be necessarily
comparable to similarly titled measures reported by other
companies.
3) “Funds From Operations per share” means net income
attributable to stockholders, computed in accordance with GAAP,
excluding gains or losses from sales of assets, depreciation and
amortization and impairment charges divided by the weighted average
shares outstanding on a fully diluted basis. We compute FFO in
accordance with our interpretation of standards established by the
National Association of Real Estate Investment Trusts (“NAREIT”),
which may not be comparable to FFO reported by REITs that do not
define the term in accordance with the current NAREIT definition or
that interpret the current NAREIT definition differently than we
do. We believe that FFO is helpful to investors as supplemental
measures of the performance of our
infrastructure investments. We believe that FFO can facilitate
comparisons of operating performance between periods by excluding
the effect of depreciation and amortization related to our
infrastructure investments and impairment charges, which are based
on historical costs and may be of limited relevance in evaluating
current performance. Our definitions and calculations of these
Non-GAAP financial and operating measures and other terms may
differ from the definitions and methodologies used by other
registrants and accordingly, may not be comparable. These Non-GAAP
financial and operating measures do not represent cash generated
from operating activities in accordance with GAAP, nor do they
represent cash available to pay distributions and they should not
be considered as an alternative to net income attributable to
stockholders, determined in accordance with GAAP, as an indication
of our financial performance, or to cash flows from operating
activities, determined in accordance with GAAP, as a measure of our
liquidity, nor is it indicative of funds available to fund our cash
needs, including our ability to make cash distributions.
4) “Illustrative Adjusted EBITDA Goal” for the second half of
2024 and full year 2024 and 2025 means our forward-looking goal for
Adjusted EBITDA for the relevant period and is based on the
"Illustrative Total Segment Operating Margin Goal" less
illustrative Core SG&A assumed to be at approximately $66
million for the second half of 2024 and $100 million for 2025,
including the pro rata share of Core SG&A from unconsolidated
entities. Management is pursuing a $659 million request for
equitable adjustment related to the early termination of our
contracts to provide emergency power services in Puerto Rico. The
actual amount of any such adjustment and the timing of any related
payments may be materially different than management’s current
estimate. As a result, the Company cannot offer any assurance as to
the actual amount that may be recovered pursuant to such request or
subsequent claim, if any.
For the purpose of this presentation, we have assumed an average
Total Segment Operating Margin between $5.96 and $28.82 per MMBtu
for all downstream terminal economics in the second half of 2024
and between $5.96 and $9.10 per MMBtu in 2025 because we assume
that (i) we purchase delivered gas at a weighted average of $6.69
in 2024 and $6.81 in 2025 (ii) our volumes increase over time, and
(iii) we will have costs related to shipping, logistics and
regasification similar to our current operations which will be
reduced when our First FLNG facility is in full production, and
those costs will be distributed over the larger volumes. We assume
all Brazil terminals and power plants are Operational and earning
revenue through fuel sales and capacity charges or other fixed
fees. For Vessels chartered to third parties, this measure reflects
the revenue from those charters, 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. We assume an average Total Segment
Operating Margin of up to $147k per day per vessel. For Fast LNG,
this measure reflects the difference between the delivered cost of
open LNG and the delivered cost of open market LNG less Fast LNG
production cost. These costs do not include expenses and income
that are required by GAAP to be recorded on our financial
statements, including the return of or return on capital
expenditures for the relevant project, and selling, general and
administrative costs. Our current cost of natural gas per MMBtu is
higher than the cost we would need to achieve Illustrative Total
Segment Operating Margin Goal, and the primary drivers for reducing
these costs are the reduced costs of purchasing gas and the
increased sales volumes, which result in lower fixed costs being
spread over a larger number of MMBtus sold. References to volumes,
percentages of such volumes and the Illustrative Total Segment
Operating Margin Goal related to such volumes (i) are not based on
the Company’s historical operating results, which are limited, and
(ii) do not purport to be an actual representation of our future
economics. Actual circumstances could differ materially from the
assumptions, and actual performance and results could differ
materially from, and there can be no assurance that they will
reflect, our corporate goal.
5) “First Cargo” refers to management's current estimate of the
date on which LNG cargo sales are expected for a project. Full
commercial operation of such project will occur later than, and may
occur substantially later than, the date of First Cargo. We cannot
assure you if or when such projects will reach the date of delivery
of First Cargo, or full commercial operations.
6) Reserved.
7) “Adjusted Net Income” means Net Income attributable to
stockholders as presented in the relevant Form 10-K or Form 10-Q
for the relevant financial period as adjusted by non-cash
impairment charges and gains or losses on disposal of our
assets.
8) “Total Segment Operating Margin” is the total of our
Terminals and Infrastructure Segment Operating Margin and Ships
Segment Operating Margin. Our segment measure also excludes
unrealized mark-to-market gains or losses on derivative instruments
and certain contract acquisition costs.
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, 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 Friday, August 9, 2024
at 8:00 A.M. Eastern Time. The conference call may be accessed by
dialing (888) 224-1005 (toll-free from within the U.S.) or
+1-323-794-2575 (from outside of the U.S.) fifteen minutes prior to
the scheduled start of the call; please reference “NFE Second
Quarter 2024 Earnings Call” or conference code 3695554.
A simultaneous webcast of the conference call will be available
to the public on a listen-only basis at www.newfortressenergy.com
under the Investors section within “Events & Presentations.”
Please allow time prior to the call to visit the site 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 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 and an integrated fleet
of 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
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,” “can,” “could,” “should,”
“predicts,” “intends,” “plans,” “estimates,” “anticipates,”
“believes,” “schedules,” “progress,” “targets,” “budgets,”
“outlook,” “trends,” “forecasts,” “projects,” “guidance,” “focus,”
“on track,” “goals,” “objectives,” “strategies,” “opportunities,”
“poised,” or the negative version of those words or other
comparable words. Forward looking statements include: our
expectation regarding our Illustrative Adjusted EBITDA Goals for
2024 and 2025; the successful development, construction,
completion, operation and/or deployment of facilities and the
timing of first LNG cargo, including our Brazil, Nicaragua and
Puerto Rico projects, on time, within budget and within the
expected specifications, capacity and design; our expectation
regarding the growth of our businesses in Puerto Rico, Brazil and
Nicaragua, our expectation regarding our ability to refinance our
Senior Secured Notes due 2025, and future strategic plans. These
forward-looking statements are necessarily estimates based upon
current information and involve a number of risks, uncertainties
and other factors, many of which are outside of the Company’s
control. Actual results or events may differ materially from the
results anticipated in these forward-looking statements. Specific
factors that could cause actual results to differ from those in the
forward-looking statements include, but are not limited to: risks
related to the development, construction, completion or
commissioning schedule for the facilities; risks related to the
operation and maintenance of our facilities and assets; failure of
our third-party contractors, equipment manufacturers, suppliers and
operators to perform their obligations for the development,
construction and operation of our projects, vessels and assets; our
ability to implement our business strategy; the risk that proposed
transactions, including any financing or refinancing transactions
may not be completed in a timely manner or at all, inability to
successfully develop and implement our technological solutions,
including our Fast LNG technology, or that we do not receive the
benefits we expect from the Fast LNG technology; cyclical or other
changes in the LNG and natural gas industries; competition in the
energy industry; the receipt of permits, approvals and
authorizations from governmental and regulatory agencies on a
timely basis or at all; new or changes to existing governmental
policies, laws, rules or regulations, or the administration
thereof; failure to maintain sufficient working capital and to
generate revenues, which could adversely affect our ability to fund
our projects; adverse regional, national, or international economic
conditions, adverse capital market conditions and adverse political
developments; and the impact of public health crises, such as
pandemics and epidemics and any related company or government
policies and actions to protect the health and safety of
individuals or government policies or actions to maintain the
functioning of national or global economies and markets. These
factors are not necessarily all of the important factors that could
cause actual results to differ materially from those expressed in
any of the Company’s forward-looking statements. Other known or
unpredictable factors could also have material adverse effects on
future results. Any forward-looking statement speaks only as of the
date on which it is made, and we undertake no duty to update or
revise any forward-looking statements, even though our situation
may change in the future or we may become aware of new or updated
information relating to such forward-looking statements. 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 New Fortress
Energy Inc.’s annual and quarterly reports filed with the
Securities and Exchange Commission, which could cause its actual
results to differ materially from those contained in any
forward-looking statement.
Exhibits – Financial Statements
Condensed Consolidated Statements of
Operations
For the three months ended March 31,
2024 and June 30, 2024
(Unaudited, in thousands of U.S.
dollars, except share and per share amounts)
For the Three Months
Ended
March 31, 2024
June 30, 2024
Revenues
Operating revenue
$
609,504
$
291,222
Vessel charter revenue
46,655
52,416
Other revenue
34,162
84,368
Total revenues
690,321
428,006
Operating expenses
Cost of sales (exclusive of depreciation
and amortization shown separately below)
229,117
221,860
Vessel operating expenses
8,396
8,503
Operations and maintenance
68,548
39,292
Selling, general and administrative
70,754
70,578
Transaction and integration costs
1,371
1,760
Depreciation and amortization
50,491
37,413
Asset impairment expense
—
4,272
Loss on sale of assets, net
77,140
—
Total operating expenses
505,817
383,678
Operating income
184,504
44,328
Interest expense
77,344
80,399
Other expense, net
19,112
47,354
Loss on extinguishment of debt, net
9,754
—
Income (loss) before income from equity
method investments and income taxes
78,294
(83,425
)
Tax provision
21,624
3,435
Net income (loss)
56,670
(86,860
)
Net (income) attributable to
non-controlling interest
(2,589
)
(1,994
)
Net income (loss) attributable to
stockholders
$
54,081
$
(88,854
)
Net income (loss) per share - basic
$
0.26
$
(0.44
)
Net income (loss) per share - diluted
$
0.26
$
(0.44
)
Weighted average number of shares
outstanding – basic
205,061,967
205,070,756
Weighted average number of shares
outstanding – diluted
205,977,720
205,851,364
Adjusted EBITDA
For the three months ended June 30, 2024
(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 from operations, net income, 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 our
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, loss on asset sales, interest expense, net, other (income)
expense, 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, certain non-capitalizable contract acquisition costs
plus our pro rata share of Adjusted EBITDA from certain
unconsolidated entities, less the impact of equity in earnings
(losses) of certain 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 certain unconsolidated entities,
minus deferred earnings for which a prepayment was received. 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, 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 and diluted earnings per share
attributable to New Fortress Energy, which are determined in
accordance with GAAP.
The following table sets forth a reconciliation of net income
(loss) to Adjusted EBITDA for the three months ended June 30, 2023,
March 31, 2024 and June 30, 2024:
(in thousands)
Three Months Ended
June 30, 2023
Three Months Ended
March 31, 2024
Three Months Ended
June 30, 2024
Total Segment Operating Margin
$
293,834
$
384,260
$
248,351
Less: Core SG&A (see definition
above)
47,381
44,112
38,190
Less: Pro rata share Core SG&A from
unconsolidated entities
—
—
—
Less: Deferred earnings from contracted
sales
—
—
90,000
Adjusted EBITDA (Non-GAAP)
$
246,453
$
340,148
$
120,161
Net income (loss)
$
120,100
$
56,670
$
(86,860
)
Add: Interest expense
64,396
77,344
80,399
Add: Tax provision
15,322
21,624
3,435
Add: Depreciation and amortization
42,115
50,491
37,413
Add: Asset impairment expense
—
—
4,272
Add: SG&A items excluded from Core
SG&A (see definition above)
8,422
26,642
32,388
Add: Transaction and integration costs
1,554
1,371
1,760
Add: Other (income) expense, net
(6,584
)
19,112
47,354
Add: Changes in fair value of non-hedge
derivative instruments and contingent consideration
(2,835
)
—
—
Add: Loss on extinguishment of debt,
net
—
9,754
—
Add: Loss on sale of assets, net
—
77,140
—
Add: (Income) from equity method
investments
(2,269
)
—
—
Add: Contract acquisition cost
6,232
—
—
Adjusted EBITDA
$
246,453
$
340,148
$
120,161
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, 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, loss on asset sales, interest expense, other (income)
expense, loss on extinguishment of debt, net, (income) loss from
equity method investments and tax (benefit) provision. 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 June 30,
2024
(in thousands of $)
Terminals and Infrastructure
(1)
Ships
Total Segment
Consolidation and
Other⁽¹⁾
Consolidated
Segment Operating Margin
$
214,276
$
34,075
$
248,351
$
(90,000
)
$
158,351
Less:
Selling, general and administrative
70,578
Transaction and integration costs
1,760
Depreciation and amortization
37,413
Asset impairment expense
4,272
Interest expense
80,399
Other expense, net
47,354
Tax provision
3,435
Net loss
$
(86,860
)
Three Months Ended March 31,
2024
(in thousands of $)
Terminals and
Infrastructure
Ships
Total Segment
Consolidation and
Other
Consolidated
Segment Operating Margin
$
350,072
$
34,188
$
384,260
$
—
$
384,260
Less:
Selling, general and administrative
70,754
Transaction and integration costs
1,371
Depreciation and amortization
50,491
Interest expense
77,344
Other expense, net
19,112
Loss on sale of assets, net
77,140
Loss on extinguishment of debt, net
9,754
Tax provision
21,624
Net income
56,670
(1)
Terminals and Infrastructure includes
deferred earnings from contracted sales that were contracted in the
current period, and prepayment for these sales was received.
Revenue will be recognized in the Condensed Consolidated Statements
of Operations and Comprehensive Income (Loss) when delivery under
these forward sales transactions is completed in the third and
fourth quarters of 2024. Consolidation and Other adjusts for the
inclusion of deferred earnings from forward contracted sales in
Total Segment Operating Margin of $90,000.
Three Months Ended June 30,
2023
(in thousands of $)
Terminals and Infrastructure
⁽¹⁾
Ships
Total Segment
Consolidation and Other
⁽¹⁾
Consolidated
Segment Operating Margin
$
239,436
$
54,398
$
293,834
$
(3,397
)
$
290,437
Less:
Selling, general and administrative
55,803
Transaction and integration costs
1,554
Depreciation and amortization
42,115
Interest expense
64,396
Other (income), net
(6,584
)
(Income) from equity method
investments
(2,269
)
Tax provision
15,322
Net income
$
120,100
(1)
The Company has excluded contract
acquisition costs that do not meet the criteria for capitalization
from the segment measure. Contract acquisition costs of $6,232 for
the three months ended June 30, 2023 reconcile Cost of sales in the
segment measure to Cost of sales in the Condensed Consolidated
Statements of Operations and Comprehensive Income (Loss).
Consolidation and Other also adjusts for the exclusion of the
unrealized mark-to-market gain or loss on derivative instruments in
our segment measure.
Adjusted Net Income and Adjusted Earnings per Share
(Unaudited, in thousands of U.S. dollars, except share and
per share amounts)
The following table sets forth a reconciliation between net
income attributable to stockholders and earnings per share adjusted
for non-cash impairment charges and losses on disposals of
assets.
Three months ended June 30,
2023
Three months ended March 31,
2024
Three months ended June 30,
2024
Net income (loss) attributable to
stockholders
$
119,248
$
54,081
$
(88,854
)
Non-cash impairment charges, net of
tax
—
—
4,272
Loss on sale of assets
—
77,140
—
Loss on disposal of equity method
investment
—
7,222
—
Adjusted net income (loss)
$
119,248
$
138,443
$
(84,582
)
Weighted-average shares outstanding -
diluted
205,711,467
205,977,720
205,851,364
Adjusted earnings per share
$
0.58
$
0.67
$
(0.41
)
Funds from Operations
For the three and six months ended June 30, 2024
(Unaudited, in thousands of U.S. dollars, except share and
per share amounts)
The following table sets forth a reconciliation between net
income attributable to stockholders and Funds from operations
("FFO") and FFO per share. We have defined FFO as net income
attributable to stockholders, adjusted by depreciation and
amortization, gains or losses from the sale of assets and
impairment charges, each as reported in our financial
statements.
Three months ended June 30,
2024
Net income (loss) attributable to
stockholders
$
(88,854
)
Depreciation/amortization
37,413
Non-cash impairment charges, net of
tax
4,272
Loss on sale of assets
—
Loss on disposal of equity method
investment
—
Funds from operations
$
(47,169
)
Weighted-average shares outstanding -
diluted
205,851,364
Funds from operations / share
$
(0.23
)
Condensed Consolidated Balance Sheets
As of June 30, 2024 and December 31, 2023
(Unaudited, in thousands of U.S. dollars, except share
amounts)
June 30, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
132,960
$
155,414
Restricted cash
164,888
155,400
Receivables, net of allowances of $10,025
and $1,158, respectively
406,779
342,371
Inventory
141,723
113,684
Prepaid expenses and other current assets,
net
277,983
213,104
Total current assets
1,124,333
979,973
Construction in progress
6,301,162
5,348,294
Property, plant and equipment, net
2,144,838
2,481,415
Equity method investments
—
137,793
Right-of-use assets
673,424
588,385
Intangible assets, net
207,731
51,815
Goodwill
776,760
776,760
Deferred tax assets, net
43,023
9,907
Other non-current assets, net
137,106
126,903
Total assets
$
11,408,377
$
10,501,245
Liabilities
Current liabilities
Current portion of long-term debt and
short-term borrowings
$
236,147
$
292,625
Accounts payable
572,746
549,489
Accrued liabilities
384,476
471,675
Current lease liabilities
120,873
164,548
Other current liabilities
250,558
227,951
Total current liabilities
1,564,800
1,706,288
Long-term debt
7,392,811
6,510,523
Non-current lease liabilities
521,225
406,494
Deferred tax liabilities, net
97,936
44,444
Other long-term liabilities
46,492
55,627
Total liabilities
9,623,264
8,723,376
Commitments and contingencies
Series A convertible preferred stock,
$0.01 par value, 96,746 shares authorized, issued and outstanding
as of June 30, 2024 (0 as of December 31, 2023); aggregate
liquidation preference of $96,746 and $0 at June 30, 2024 and
December 31, 2023
97,845
—
Stockholders’ equity
Class A common stock, $0.01 par value, 750
million shares authorized, 205.1 million issued and outstanding as
of June 30, 2024; 205.0 million issued and outstanding as of
December 31, 2023
2,050
2,050
Additional paid-in capital
1,063,426
1,038,530
Retained earnings
450,871
527,986
Accumulated other comprehensive income
43,653
71,528
Total stockholders' equity attributable
to NFE
1,560,000
1,640,094
Non-controlling interest
127,268
137,775
Total stockholders' equity
1,687,268
1,777,869
Total liabilities, convertible
preferred stock and stockholders’ equity
$
11,408,377
$
10,501,245
Condensed Consolidated Statements of Operations
For the three and six months ended June 30, 2024 and
2023
(Unaudited, in thousands of U.S. dollars, except share and
per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenues
Operating revenue
$
291,222
$
494,619
$
900,726
$
996,307
Vessel charter revenue
52,416
65,840
99,071
142,364
Other revenue
84,368
886
118,530
1,805
Total revenues
428,006
561,345
1,118,327
1,140,476
Operating expenses
Cost of sales (exclusive of depreciation
and amortization shown separately below)
221,860
225,768
450,977
410,706
Vessel operating expenses
8,503
11,443
16,899
24,734
Operations and maintenance
39,292
33,697
107,840
60,368
Selling, general and administrative
70,578
55,803
141,332
107,941
Transaction and integration costs
1,760
1,554
3,131
2,048
Depreciation and amortization
37,413
42,115
87,904
76,490
Asset impairment expense
4,272
—
4,272
—
Loss on sale of assets, net
—
—
77,140
—
Total operating expenses
383,678
370,380
889,495
682,287
Operating income
44,328
190,965
228,832
458,189
Interest expense
80,399
64,396
157,743
136,069
Other expense (income), net
47,354
(6,584
)
66,466
18,421
Loss on extinguishment of debt, net
—
—
9,754
—
Income (loss) before income from equity
method investments and income taxes
(83,425
)
133,153
(5,131
)
303,699
Income from equity method investments
—
2,269
—
12,249
Tax provision
3,435
15,322
25,059
44,282
Net income (loss)
(86,860
)
120,100
(30,190
)
271,666
Net (income) attributable to
non-controlling interest
(1,994
)
(852
)
(4,583
)
(2,212
)
Net income (loss) attributable to
stockholders
$
(88,854
)
$
119,248
$
(34,773
)
$
269,454
Net income (loss) per share – basic
$
(0.44
)
$
0.58
$
(0.18
)
$
1.30
Net income (loss) per share – diluted
$
(0.44
)
$
0.58
$
(0.18
)
$
1.29
Weighted average number of shares
outstanding – basic
205,070,756
205,045,121
205,066,362
206,867,828
Weighted average number of shares
outstanding – diluted
205,851,364
205,711,467
205,846,970
207,534,174
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2024 and 2023
(Unaudited, in thousands of U.S. dollars)
Six Months Ended June
30,
2024
2023
Cash flows from operating
activities
Net income (loss)
$
(30,190
)
$
271,666
Adjustments for:
Depreciation and amortization
88,400
76,949
Deferred taxes
(13,860
)
—
Share-based compensation
25,312
1,179
Movement in credit loss allowances
8,827
(146
)
Loss on asset sales
77,140
—
Loss on extinguishment of debt
9,754
—
(Earnings) recognized from vessels
chartered to third parties transferred to Energos
(51,674
)
(71,536
)
Loss on the disposal of equity method
investment
7,222
37,401
Asset impairment expense
4,272
—
Other
20,716
5,555
Changes in operating assets and
liabilities:
(Increase) in receivables
(114,030
)
(14,532
)
(Increase) in inventories
(62,815
)
(60,710
)
(Increase) decrease in other assets
(91,251
)
63,576
Decrease in right-of-use assets
111,561
40,655
Increase in accounts payable/accrued
liabilities
255,337
75,746
(Decrease) in lease liabilities
(126,311
)
(38,885
)
Increase in other liabilities
44,558
116,959
Net cash provided by operating
activities
162,968
503,877
Cash flows from investing
activities
Capital expenditures
(1,346,385
)
(1,465,642
)
Sale of equity method investment
136,365
100,000
Asset sales
328,999
—
Other investing activities
(1,694
)
(1,450
)
Net cash used in investing
activities
(882,715
)
(1,367,092
)
Cash flows from financing
activities
Proceeds from borrowings of debt
3,037,127
919,625
Payment of deferred financing costs
(37,983
)
(6,659
)
Repayment of debt
(2,202,722
)
—
Payment of dividends
(55,710
)
(676,918
)
Other financing activities
(5,033
)
(13,465
)
Net cash provided by financing
activities
735,679
222,583
Impact of changes in foreign exchange
rates on cash and cash equivalents
(28,898
)
1,608
Net (decrease) in cash, cash
equivalents and restricted cash
(12,966
)
(639,024
)
Cash, cash equivalents and restricted
cash – beginning of period
310,814
855,083
Cash, cash equivalents and restricted
cash – end of period
$
297,848
$
216,059
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Investor Relations:
ir@newfortressenergy.com Media
Relations: Ben Porritt press@newfortressenergy.com (516)
268-7403
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