New fortress energy announces first quarter 2022 results
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. summary highlights reported q1 2022 net cash flow from operations of $114 million, net income of approximately $241 million and eps of $1.13 per share on a fully diluted basis reported q1 2022 adjusted ebitda of approximately $258 million (six-months trailing of $592 million) reiterated on-track to achieve illustrative full-year 2022 and 2023 adjusted ebitda targets(1) of $1.0+ billion and $1.5+ billion, respectively nfe’s board of directors approved a dividend of $0.10 per share, with a record date of june 14, 2022 and a payment date of june 28, 2022 continued to execute across multiple strategic initiatives. within the past 60 days: accelerated optimization initiatives associated with nfe’s floating storage and regasification (fsru) ships portfolio – 9 fsrus in total (6 operational, 3 conversion candidates), 3 open / coming open in 2022 executed two 20-year sale and purchase agreements with venture global for total 2 million tonnes per annum (mtpa) of lng supply on free-on-board basis (fob) from announced / expected onshore louisiana lng facilities materially progressed fast lng liquefaction fid projects (fast lng 1-3) and new fast lng opportunities: advanced commercial discussions with eni(2) for 1.4 mtpa (tolling arrangement with 50% offtake rights to nfe per signed mou announced 2/28) filed permit applications for 2.8 mtpa deployment offshore louisiana (100% merchant to nfe, targeted initial in-service 1q23) long-lead procurement items for fast lng units 2 and 3 have been placed; on schedule with construction activities to place 2 fast lng units into service in 2023 advanced pre-application progress for 6 additional fast lng permits (1.4 mtpa each) for offshore u.s. gulf coast deployment advanced zero parks hydrogen business in-line with previously reported expectations; expect to reach fid(3) and break ground on u.s. gulf coast green hydrogen project in q2 2022 accelerated optimization initiatives associated with nfe’s floating storage and regasification (fsru) ships portfolio – 9 fsrus in total (6 operational, 3 conversion candidates), 3 open / coming open in 2022 executed two 20-year sale and purchase agreements with venture global for total 2 million tonnes per annum (mtpa) of lng supply on free-on-board basis (fob) from announced / expected onshore louisiana lng facilities materially progressed fast lng liquefaction fid projects (fast lng 1-3) and new fast lng opportunities: advanced commercial discussions with eni(2) for 1.4 mtpa (tolling arrangement with 50% offtake rights to nfe per signed mou announced 2/28) filed permit applications for 2.8 mtpa deployment offshore louisiana (100% merchant to nfe, targeted initial in-service 1q23) long-lead procurement items for fast lng units 2 and 3 have been placed; on schedule with construction activities to place 2 fast lng units into service in 2023 advanced pre-application progress for 6 additional fast lng permits (1.4 mtpa each) for offshore u.s. gulf coast deployment advanced commercial discussions with eni(2) for 1.4 mtpa (tolling arrangement with 50% offtake rights to nfe per signed mou announced 2/28) filed permit applications for 2.8 mtpa deployment offshore louisiana (100% merchant to nfe, targeted initial in-service 1q23) long-lead procurement items for fast lng units 2 and 3 have been placed; on schedule with construction activities to place 2 fast lng units into service in 2023 advanced pre-application progress for 6 additional fast lng permits (1.4 mtpa each) for offshore u.s. gulf coast deployment advanced zero parks hydrogen business in-line with previously reported expectations; expect to reach fid(3) and break ground on u.s. gulf coast green hydrogen project in q2 2022 financial highlights three months ended (in millions, except average volumes) march 31, 2021 december 31, 2021 march 31, 2022 revenues $ 145.7 $ 648.6 $ 505.1 net (loss) income $ (39.5 ) $ 151.7 $ 241.2 terminals and infrastructure segment operating margin(4) $ 32.8 $ 278.4 $ 211.1 ships segment operating margin(4) $ — $ 94.8 $ 89.0 total segment operating margin(4) $ 32.8 $ 373.2 $ 300.1 adjusted ebitda(5) $ 8.6 $ 334.0 $ 257.7 average volumes (k gpd) 1,440 2,881 2,144 please refer to our q1 2022 investor presentation (the “presentation”) for further information about the following terms: 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 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. exhibits – financial statements 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 december 31, 2021 march 31, 2022 revenues operating revenue $ 548,395 $ 400,075 vessel charter revenue 87,592 92,420 other revenue 12,644 12,623 total revenues 648,631 505,118 operating expenses cost of sales 282,477 208,298 vessel operating expenses 20,976 22,964 operations and maintenance 18,356 23,168 selling, general and administrative 74,927 48,041 transaction and integration costs 2,107 1,901 depreciation and amortization 30,297 34,290 total operating expenses 429,140 338,662 operating income 219,491 166,456 interest expense 46,567 44,916 other (income), net (3,692 ) (19,725 ) loss on extinguishment of debt, net 10,975 — net income before income / loss from equity method investments and income taxes 165,641 141,265 (loss) income from equity method investments (8,515 ) 50,235 tax provision (benefit) 5,403 (49,681 ) net income 151,723 241,181 net income attributable to non-controlling interest (866 ) (2,912 ) net income attributable to stockholders $ 150,857 $ 238,269 net income per share – basic $ 0.73 $ 1.14 net income per share – diluted $ 0.72 $ 1.13 weighted average number of shares outstanding – basic 207,479,963 209,928,070 weighted average number of shares outstanding – diluted 210,511,076 210,082,295 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: (in thousands) three months ended march 31, 2021 three months ended december 31, 2021 three months ended march 31, 2022 total segment operating margin $ 32,761 $ 373,150 $ 300,083 less: core sg&a (see definition above) 24,129 38,033 40,960 less: pro rata share core sg&a from unconsolidated entities — 1,110 1,390 adjusted ebitda $ 8,632 $ 334,007 $ 257,733 net (loss) income $ (39,509 ) $ 151,723 $ 241,181 add: interest expense (net of interest income) 18,680 46,567 44,916 add: tax provision (benefit) (877 ) 5,403 (49,681 ) add: depreciation and amortization 9,890 30,297 34,290 add: sg&a items excluded from core sg&a (see definition above) 9,488 36,894 7,081 add: transaction and integration costs 11,564 2,107 1,901 add: other (income), net (604 ) (3,692 ) (19,725 ) add: changes in fair value of non-hedge derivative instruments and contingent consideration — 472 (2,492 ) add: loss on extinguishment of debt, net — 10,975 — add: pro rata share of adjusted ebitda from unconsolidated entities(1) — 44,746 50,497 less: loss (income) from equity method investments — 8,515 (50,235 ) adjusted ebitda $ 8,632 $ 334,007 $ 257,733 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. three months ended march 31, 2022 (in thousands of $) terminals and infrastructure ⁽¹⁾ ships ⁽²⁾ total segment consolidation and other ⁽³⁾ 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 ) (income) from equity method investments (50,235 ) tax (benefit) (49,681 ) net income $ 241,181 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. three months ended december 31, 2021 (in thousands of $) terminals and infrastructure ⁽¹⁾ ships ⁽²⁾ total segment consolidation and other ⁽³⁾ 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 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. three months ended march 31, 2021 (in thousands of $) terminals and infrastructure ships total segment consolidation and other consolidated segment operating margin $ 32,761 $ — $ 32,761 $ — $ 32,761 less: selling, general and administrative 33,617 transaction and integration costs 11,564 depreciation and amortization 9,890 interest expense 18,680 other (income), net (604 ) loss from equity method investments — tax provision (877 ) net loss $ (39,509 ) 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) march 31, 2022 december 31, 2021 assets current assets cash and cash equivalents $ 156,173 $ 187,509 restricted cash 74,873 68,561 receivables, net of allowances of $164 and $164, respectively 238,614 208,499 inventory 54,273 37,182 prepaid expenses and other current assets, net 82,392 83,115 total current assets 606,325 584,866 restricted cash 7,960 7,960 construction in progress 1,238,313 1,043,883 property, plant and equipment, net 2,160,025 2,137,936 equity method investments 1,327,444 1,182,013 right-of-use assets 419,819 309,663 intangible assets, net 135,650 142,944 finance leases, net 601,953 602,675 goodwill 760,135 760,135 deferred tax assets, net 6,048 5,999 other non-current assets, net 102,136 98,418 total assets $ 7,365,808 $ 6,876,492 liabilities current liabilities current portion of long-term debt $ 100,666 $ 97,251 accounts payable 81,126 68,085 accrued liabilities 252,859 244,025 current lease liabilities 60,552 47,114 other current liabilities 83,128 106,036 total current liabilities 578,331 562,511 long-term debt 3,836,610 3,757,879 non-current lease liabilities 336,399 234,060 deferred tax liabilities, net 239,060 269,513 other long-term liabilities 57,503 58,475 total liabilities 5,047,903 4,882,438 commitments and contingencies stockholders’ equity 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 2,076 2,069 additional paid-in capital 1,888,842 1,923,990 retained earnings (accumulated deficit) 105,870 (132,399 ) accumulated other comprehensive income (loss) 116,789 (2,085 ) total stockholders' equity attributable to nfe 2,113,577 1,791,575 non-controlling interest 204,328 202,479 total stockholders' equity 2,317,905 1,994,054 total liabilities and stockholders' equity $ 7,365,808 $ 6,876,492 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) three months ended march 31, 2022 2021 revenues operating revenue $ 400,075 $ 91,196 vessel charter revenue 92,420 — other revenue 12,623 54,488 total revenues 505,118 145,684 operating expenses cost of sales 208,298 96,671 vessel operating expenses 22,964 — operations and maintenance 23,168 16,252 selling, general and administrative 48,041 33,617 transaction and integration costs 1,901 11,564 depreciation and amortization 34,290 9,890 total operating expenses 338,662 167,994 operating income (loss) 166,456 (22,310 ) interest expense 44,916 18,680 other (income), net (19,725 ) (604 ) net income (loss) before income from equity method investments and income taxes 141,265 (40,386 ) income from equity method investments 50,235 — tax benefit (49,681 ) (877 ) net income (loss) 241,181 (39,509 ) net (income) loss attributable to non-controlling interest (2,912 ) 1,606 net income (loss) attributable to stockholders $ 238,269 $ (37,903 ) net income (loss) per share – basic $ 1.14 $ (0.21 ) net income (loss) per share – diluted $ 1.13 $ (0.21 ) weighted average number of shares outstanding – basic 209,928,070 176,500,576 weighted average number of shares outstanding – diluted 210,082,295 176,500,576 other comprehensive income (loss): net income (loss) $ 241,181 $ (39,509 ) currency translation adjustment 120,830 (997 ) comprehensive income (loss) 362,011 (40,506 ) comprehensive loss (income) attributable to non-controlling interest (4,868 ) 2,480 comprehensive income (loss) attributable to stockholders $ 357,143 $ (38,026 ) condensed consolidated statements of cash flows for the three months ended march 31, 2022 and 2021 (unaudited, in thousands of u.s. dollars) three months ended march 31, 2022 2021 cash flows from operating activities net income (loss) $ 241,181 $ (39,509 ) adjustments for: amortization of deferred financing costs and debt guarantee, net 3,424 400 depreciation and amortization 34,852 10,160 (earnings) of equity method investees (50,235 ) — drydocking expenditure (2,454 ) — dividends received from equity method investees 7,609 — change in market value of derivatives (24,855 ) — deferred taxes (58,769 ) (1,412 ) share-based compensation 880 1,770 other 997 393 changes in operating assets and liabilities, net of acquisitions: (increase) in receivables (58,462 ) (19,223 ) (increase) in inventories (18,617 ) (5,171 ) (increase) in other assets (15,440 ) (36,943 ) decrease in right-of-use assets 17,016 9,772 increase (decrease) in accounts payable/accrued liabilities 68,520 (22,399 ) increase in amounts due to affiliates 2,035 1,879 (decrease) in lease liabilities (11,773 ) (10,584 ) (decrease) in other liabilities (21,527 ) (1,119 ) net cash provided by (used in) operating activities 114,382 (111,986 ) cash flows from investing activities capital expenditures (189,221 ) (80,810 ) entities acquired in asset acquisitions, net of cash acquired — (8,817 ) other investing activities — (630 ) net cash (used in) investing activities (189,221 ) (90,257 ) cash flows from financing activities proceeds from borrowings of debt 200,836 — payment of deferred financing costs (3,504 ) (670 ) repayment of debt (123,669 ) — payments related to tax withholdings for share-based compensation (13,054 ) (29,564 ) payment of dividends (23,773 ) (17,657 ) net cash provided by financing activities 36,836 (47,891 ) effect of exchange rate changes on cash, cash equivalents and restricted cash 12,979 — net (decrease) in cash, cash equivalents and restricted cash (25,024 ) (250,134 ) cash, cash equivalents and restricted cash – beginning of period 264,030 629,336 cash, cash equivalents and restricted cash – end of period $ 239,006 $ 379,202 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 $ 19,838 $ 26,311 liabilities associated with consideration paid for entities acquired in asset acquisitions — 11,845
