New Fortress Energy Inc. (Nasdaq: NFE) (“NFE” or the “Company”)
today reported its financial results for the fourth quarter and for
the year ended December 31, 2023.
Summary Highlights
- Adjusted EBITDA(1) of $388 million in the fourth quarter of
2023 and $1.3 billion in the full year 2023
- Net income of $215 million in the fourth quarter of 2023 and
$549 million in the full year 2023
- Adjusted EPS(2) of $1.01 on a fully diluted basis in the fourth
quarter of 2023 and $2.75 in the full year 2023
- EPS of $1.06 on a fully diluted basis in the fourth quarter of
2023 and $2.65 in the full year 2023
- Funds from Operations per share(3) of $1.36 on a fully diluted
basis in the fourth quarter of 2023 and $3.56 in the full year
2023; Funds from Operations(3) is calculated as Net income
attributable to stockholders(2) plus Depreciation and amortization,
and the Company believes this is an important metric of our
quarterly and annual performance
"This year was a record by all of our
reported metrics and importantly, during the second half of the
year, there was no profit from Cargo Sales recorded. In other
words, all of our performance was a result of downstream operating
results. This is a major change in the Company’s performance, and a
significant and meaningful improvement in both the quality and
quantity of our results," said Wes Edens, NFE president and chief
executive officer.
Operational Highlights
In Brazil, we completed the Barcarena and Santa Catarina
terminals and placed them into service(4) in February 2024. This
marks a significant milestone as it now fully opens our Brazil
operations, and we expect to begin generating revenue in March
2024. The Brazilian gas and power markets are growing
significantly, and our terminals give us significant opportunities
to grow and expand our Company.
In Puerto Rico, we completed the installation of two FEMA Power
plants in 2023, totaling 350 MW of capacity. These have become
cornerstone plants in the Puerto Rico power complex and were
dispatched approximately 99% of the time since installation.
In Fast LNG, we successfully placed our first unit into its
location and are now expecting first LNG(5) in March and First
Cargo(5) in April 2024. We also secured financing commitments of
$700 million(6) for our second FLNG project located onshore
Altamira, Mexico, and expect to complete construction in the first
quarter of 2026.(7)
Financial Highlights
In 2023, we generated significant increases in Funds from
Operations per share(2), more than doubling compared to the full
year 2022. Our Illustrative Goal is to nearly double these metrics
again in the full year 2024.(8)(9)
At the same time, our Gross(10) and Net Capex(11) peaked and are
expected to decline significantly from prior years beginning in
2024 and beyond.
(in millions, except per share
amounts)
Year ended December 31,
2021
Year ended December 31,
2022
Year ended December 31,
2023
Illustrative
Goals(8)(9)(15)(16)(17)
Year ended December 31,
2024
EPS (diluted)
$
0.47
$
0.93
$
2.65
$
~5.00
Funds From Operations(3)/share
$
0.97
$
1.61
$
3.56
$
~6.00
Gross Capex(10)
$
~600
$
~1,100
$
~2,800
$
~1,500
(-) Asset Level Financings
$
~(100)
$
~(300)
$
~(400)
$
~(1,250)
Net Capex(11)
$
~500
$
~800
$
~2,400
$
~250
On February 26, 2024, NFE’s Board of Directors approved a
dividend of $0.10 per share, with a record date of March 15, 2024
and a payment date of March 27, 2024.(12)
Company Overview
The Company is now a fully integrated LNG and power company. We
own, operate, or provide natural gas to thirty plants in five
countries with total capacity of approximately 8.7 GW.(18)(19) Our
downstream assets operate in some of the highest growth regions in
the world driven by fuel switching and new power generation. As a
result, our business generates peer leading margins, excess asset
capacity, and accelerating free cash flow at minimal additional
capital.
Financial Detail
Three Months Ended
Year Ended
(in millions, except per share
amounts)
September 30,
2023
December 31,
2023
December 31,
2023
Revenues
$
514.5
$
758.4
$
2,413.3
Net income
$
62.3
$
214.9
$
548.9
Diluted EPS
$
0.30
$
1.06
$
2.65
Adjusted net income
$
53.4
$
206.6
$
566.9
Adjusted EPS(13)
$
0.26
$
1.01
$
2.75
Terminals and Infrastructure
Segment Operating Margin(14)
$
194.7
$
373.2
$
1,209.5
Ships Segment Operating
Margin(14)
$
54.9
$
54.2
$
242.2
Total Segment Operating
Margin(14)
$
249.7
$
427.4
$
1,451.7
Adjusted EBITDA(1)
$
208.4
$
387.6
$
1,282.4
The Company continues to evaluate opportunities to refinance all
or a portion of its 6.75% senior secured notes due September
2025.
Please refer to our Q4 2023 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 13 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 our Net Income
attributable to stockholders plus Depreciation and Amortization
divided by the weighted average shares outstanding on a fully
diluted basis for the period indicated. Management believes that
FFO is a helpful measure in evaluating the performance of the
Company has and will have significant amounts of Depreciation due
to its infrastructure projects. FFO should not be considered as an
alternative to net income (determined in accordance with GAAP), nor
as the sole indicator of the Company’s financial performance, nor
as an alternative to cash flows from operating activities
(determined in accordance with GAAP), nor as a measure of the
Company’s liquidity, nor is it necessarily indicative of sufficient
cash flow to fund all of the Company’s needs. Other companies may
define this term in a different manner. We believe that in order to
facilitate a clear understanding of the results of the Company, FFO
should be examined in connection with net income and cash flows
from operating activities in the consolidated financial
statements.
4) "Completed", “Placed into service” or similar statuses
(either capitalized or lower case) with respect to a particular
project means we expect gas to be made available in the near
future, 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
have begun. We cannot assure you if or when such projects will
reach full commercial operation. Our ability to export liquefied
natural gas depends on our ability to obtain export and other
permits from governmental and regulatory agencies. No assurance can
be given that we will receive required permits, approvals and
authorizations from governmental and regulatory agencies in
connection with the exportation of liquefied natural gas on a
timely basis or at all or that, once received, we will be able to
maintain in full force and effect, renew or replace such permits,
approvals and authorizations.
5) “First Gas” or “First LNG” or “First Cargo” refers to the
date on which (or, for future dates, management's current estimate
of the date on which) natural gas, LNG or cargo sales are expected
for a project, including a facility in development. Full commercial
operation of such project will occur later than, and may occur
substantially later than, the date of first gas or first LNG. We
cannot assure you if or when such projects will reach the date of
delivery of first gas, LNG or Cargo, or full commercial
operations
6) The Company has signed a commitment letter to enter into a
$700 million term loan to complete construction of the Second FLNG
unit onshore Altamira. Closing of the financing is subject to the
finalization of a credit agreement and the satisfaction of
customary closing conditions, and the Company can make no assurance
that the financing will be completed.
7) Lead times and expected development times used in this
Presentation indicate our internal evaluations of a project’s
expected timeline. They refer to us completing certain stages of
projects within a timeframe and within a spectrum of budget
parameters that, when taken as a whole, are substantially
consistent with our business model. These timeframes include
assumptions regarding items that are outside our control, including
permitting, weather, supply of equipment and materials, and other
potential sources of delay. To the extent that projects have not
yet started or are currently under development, we can make no
assurance that such projects are on track within the timeline
parameters we establish. Additionally, the construction of
facilities is inherently subject to the risks of cost overruns and
delays. If we are unable to construct, commission, complete and
operate any of our facilities as expected, or, when and if
constructed, any of them do not accomplish our goals, estimates
regarding timelines, budget and savings could be materially and
adversely affected.
8) “Illustrative EPS Goal” 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 Illustrative EPS Goal
as Illustrative Net Income Goal divided by the weighted average
shares outstanding on a fully diluted basis as of today’s date. 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. Illustrative EPS
Goal 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.
9) “Illustrative FFO Goal” means our Illustrative Net Income
attributable to stockholders plus Illustrative Depreciation and
Amortization for any future period. 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. Illustrative FFO Goal 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.
10)“Gross capex” includes all cash payments to vendors in such
period related to new projects or projects Under Development
excluding capitalized interest. Investors are encouraged to review
the related GAAP financial measures, and not to rely on any single
financial measure to evaluate our business. Capex, gross capex, net
capex and capital investment or similar metrics are not
measurements under GAAP.
11)“Net capex” includes all cash payments in such period related
to new projects or projects Under Development less cash proceeds
received by the Company for related asset sales or direct asset
financings.
12) The payment of dividends under the dividend policy will be
made at the discretion of the Board and will be subject to the
Board's final determination based on a number of factors,
including, but not limited to, the Company's financial performance,
its available cash resources, the terms of its indebtedness, its
cash requirements, credit rating impacts, alternative uses of cash
that the Board may conclude would represent an opportunity to
generate a greater return on investment for the Company, and
restrictions and other factors the Board deems relevant at the time
it determines to declare such dividends. The dividend policy may be
revised, suspended, or cancelled at the discretion of the Board at
any time.
13) “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.
14) “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" included our effective share of revenue, expenses
and operating margin attributable to our 50% ownership of Centrais
Elétricas de Sergipe Participações S.A. (“CELSEPAR”) prior to the
disposition of this investment in the fourth quarter of 2022.
"Ships Segment Operating Margin" included our effective share of
revenue, expenses and operating margin attributable to our
ownership of 50% of the common units of Hilli LLC prior to the
disposition of this investment in the first quarter of 2023. Hilli
LLC owns Golar Hilli Corporation, the disponent owner of the Hilli
Episeyo. Our segment measure also excludes unrealized
mark-to-market gains or losses on derivative instruments and
certain contract acquisition costs.
15) Illustrative Gross Capex Goal reflects management’s goal for
total expected cash payments to vendors in such period related to
new projects or projects Under Development excluding any remaining
capex related to FLNG 1 as it has achieved First Gas, the Company’s
projects in Brazil which are expected to be built with debt
financing, and FLNG 3, 4, and 5 which we will look to fund through
debt financing or partnership.
16) Represents management’s goal for financings that will be
used to fund capital expenditures at new and existing
projects. Certain of these financings have not closed and the
Company can make no assurance that the financings will be
completed.
17) Illustrative Net Capex Goal is calculated by subtracting
Illustrative Financings Goal from Illustrative Gross Capex Goal.
Investors are encouraged to review the related GAAP financial
measures, and not to rely on any single financial measure to
evaluate our business.
18) GW means 1 billion watts. 8.7GW is based on
management’s estimate of the maximum amount of GW of power that the
Company either owns, manages or supplies.
19) Management’s estimate of potential capacity and utilization
at the Company’s operating terminals and terminals under
development. Actual capacity may be lower, especially for terminals
that are not yet fully Operational (Barcarena, Santa Catarina and
Nicaragua).
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, February 29,
2024 at 8:00 A.M. Eastern Time. The conference call may be accessed
by dialing (888) 256-1007 (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 Fourth
Quarter 2023 Earnings Call” or conference code 6392277.
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 under “Events & Presentations.”
Please allow 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 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 raising external financing; the successful
development, construction, completion, operation and/or deployment
of facilities and the timing of first gas or first LNG, including
our FLNG, Brazil, Nicaragua and Puerto Rico projects, on time,
within budget and within the expected specifications, capacity and
design; our expectation regarding increases in earnings and
decreases in capital expenditures beginning in 2024, Illustrative
Adjusted EPS and FFO Goals; our expectation regarding the common
dividend; and future strategic plans; and all the information in
the exhibits to this press release. 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 may not be completed
in a timely manner or at all, including related to the Company’s
proposed Asset Sales, including whether a market will develop for
such assets and whether the Company will be able to agree to
acceptable pricing and other terms offered by potential buyers;
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
Consolidated Statements of
Operations
For the three months ended September
30, 2023 and December 31, 2023
(Unaudited, in thousands of U.S.
dollars, except share and per share amounts)
For the Three Months
Ended
September 30, 2023
December 31, 2023
Revenues
Operating revenue
$
420,868
$
643,037
Vessel charter revenue
67,287
67,192
Other revenue
26,307
48,129
Total revenues
514,462
758,358
Operating expenses
Cost of sales (exclusive of depreciation
and amortization shown separately below)
208,260
258,485
Vessel operating expenses
11,613
9,092
Operations and maintenance
44,479
61,938
Selling, general and administrative
49,107
48,056
Transaction and integration costs
2,739
2,159
Depreciation and amortization
48,670
62,164
Asset impairment expense
—
10,958
Gain on sale of assets, net
(7,844
)
(21,534
)
Total operating expenses
357,024
431,318
Operating income
157,438
327,040
Interest expense
64,822
76,951
Other (income) expense, net
5,573
(13,586
)
Loss on extinguishment of debt, net
—
—
Income before income from equity method
investments and income taxes
87,043
263,675
Income (loss) from equity method
investments
489
(2,766
)
Tax provision
25,194
46,037
Net income
62,338
214,872
Net (income) loss attributable to
non-controlling interest
(1,117
)
2,335
Net income attributable to
stockholders
$
61,221
$
217,207
Net income per share – basic
$
0.30
$
1.06
Net income per share – diluted
$
0.30
$
1.06
Weighted average number of shares
outstanding – basic
205,032,928
205,032,928
Weighted average number of shares
outstanding – diluted
205,032,928
205,563,276
Adjusted EBITDA For the three months and year ended
December 31, 2023 (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, 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 and gains from the sale of assets.
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.
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 to
Adjusted EBITDA for the three months ended September 30, 2023 and
December 31, 2023 and the year ended December 31, 2023:
(in thousands)
Three Months
Ended
September 30,
2023
Three Months
Ended
December 31,
2023
Year Ended
December 31,
2023
Total Segment Operating Margin
$
249,687
$
427,352
$
1,451,690
Less: Core SG&A (see definition
above)
41,289
39,780
169,246
Less: Pro rata share Core SG&A from
unconsolidated entities
—
—
14
Adjusted EBITDA (Non-GAAP)
$
208,398
$
387,572
$
1,282,430
Net income
$
62,338
$
214,872
$
548,876
Add: Interest expense
64,822
76,951
277,842
Add: Tax provision
25,194
46,037
115,513
Add: Depreciation and amortization
48,670
62,164
187,325
Add: Asset impairment expense
—
10,958
10,958
Add: SG&A items excluded from Core
SG&A (see definition above)
7,818
8,276
35,858
Add: Transaction and integration costs
2,739
2,159
6,946
Add: Other (income) expense, net
5,573
(13,586
)
10,408
Add: Changes in fair value of non-hedge
derivative instruments and contingent consideration
(423
)
(1,491
)
106,392
Add: Loss (gain) on sale of assets,
net
(7,844
)
(21,534
)
(29,378
)
Add: Pro rata share of Adjusted EBITDA
from unconsolidated entities
—
—
15,430
Add: Loss (income) from equity method
investments
(489
)
2,766
(9,972
)
Add: Contract acquisition cost
—
—
6,232
Adjusted EBITDA
$
208,398
$
387,572
$
1,282,430
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, gains on asset sales, interest expense, other (income)
expense, loss on extinguishment of debt, net, (income) loss 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.
Year Ended December 31,
2023
(in thousands of $)
Terminals and
Infrastructure (1)
Ships
Total
Segment
Consolidation
and
Other (1)
Consolidated
Segment Operating Margin
$
1,209,472
$
242,218
$
1,451,690
$
(128,069
)
$
1,323,621
Less:
Selling, general and administrative
205,104
Transaction and integration costs
6,946
Depreciation and amortization
187,324
Asset impairment expense
10,958
Interest expense
277,842
Other (income) expense, net
10,408
Gain on sale of assets, net
(29,378
)
(Income) from equity method
investments
(9,972
)
Tax provision
115,513
Net income
548,876
(1)
Consolidation and Other also
adjusts for the exclusion of the unrealized mark-to-market gain or
loss on derivative instruments in our segment measure.
Three Months Ended December
31, 2023
(in thousands of $)
Terminals and
Infrastructure
(1)
Ships
Total
Segment
Consolidation
and
Other (1)
Consolidated
Segment Operating Margin
$
373,154
$
54,198
$
427,352
$
1,491
$
428,843
Less:
Selling, general and administrative
48,056
Transaction and integration costs
2,159
Depreciation and amortization
62,164
Asset impairment expense
10,958
Gain on sale of assets, net
(21,534
)
Interest expense
76,951
Other (income), net
(13,586
)
Loss from equity method investments
2,766
Tax provision (benefit)
46,037
Net income
214,872
(1)
Consolidation and Other also
adjusts for the exclusion of the unrealized mark-to-market gain or
loss on derivative instruments in our segment measure.
Three Months Ended September
30, 2023
(in thousands of $)
Terminals and
Infrastructure
(1)
Ships
Total
Segment
Consolidation
and
Other (1)
Consolidated
Segment Operating Margin
$
194,743
$
54,944
$
249,687
$
423
$
250,110
Less:
Selling, general and administrative
49,107
Transaction and integration costs
2,739
Depreciation and amortization
48,670
Interest expense
64,822
Other (income) expense, net
5,573
Gain on sale of assets, net
(7,844
)
(Income) from equity method
investments
(489
)
Tax provision
25,194
Net income
62,338
(1)
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)
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
September 30,
2023
Three months
ended
December 31,
2023
Year ended
December 31,
2023
Year ended
December 31,
2022
Net income attributable to
stockholders
$
61,221
$
217,207
$
547,882
$
194,479
Non-cash impairment charges, net of
tax
—
10,958
10,958
381,302
Gain on sale of assets
(7,844
)
(21,534
)
(29,378
)
—
Loss on disposal of investment in Hilli
LLC
—
—
37,401
—
Adjusted net income
$
53,377
$
206,631
$
566,863
$
575,781
Weighted-average shares outstanding -
diluted
205,032,928
205,563,276
206,481,977
209,854,413
Adjusted earnings per share
$
0.26
$
1.01
$
2.75
$
2.74
Funds from Operations For the three months and year
ended December 31, 2023 (Unaudited, in thousands of U.S.
dollars)
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, each as reported in our financial statements.
Three months ended
December 31, 2023
Year ended
December 31, 2023
Year ended
December 31, 2022
Net income attributable to
stockholders
$
217,207
$
547,882
$
194,479
Plus: Depreciation and
amortization
62,164
187,324
142,640
Funds from operations
$
279,371
$
735,206
$
337,119
Weighted-average shares
outstanding - diluted
205,563,276
206,481,977
209,854,413
Funds from operations /
share
$
1.36
$
3.56
$
1.61
Consolidated Balance Sheets
As of December 31, 2023 and
2022
(Unaudited, in thousands of
U.S. dollars, except share amounts)
December 31, 2023
December 31, 2022
Assets
Current assets
Cash and cash equivalents
$
155,414
$
675,492
Restricted cash
155,400
165,396
Receivables, net of allowances of $1,158
and $884, respectively
342,371
280,313
Inventory
113,684
39,070
Prepaid expenses and other current assets,
net
213,104
226,883
Total current assets
979,973
1,387,154
Construction in progress
5,348,294
2,418,608
Property, plant and equipment, net
2,481,415
2,116,727
Equity method investments
137,793
392,306
Right-of-use assets
588,385
377,877
Intangible assets, net
51,815
85,897
Goodwill
776,760
776,760
Deferred tax assets, net
9,907
8,074
Other non-current assets, net
126,903
141,679
Total assets
$
10,501,245
$
7,705,082
Liabilities
Current liabilities
Current portion of long-term debt and
short-term borrowings
$
292,625
$
64,820
Accounts payable
549,489
80,387
Accrued liabilities
471,675
1,162,412
Current lease liabilities
164,548
48,741
Other current liabilities
227,951
52,878
Total current liabilities
1,706,288
1,409,238
Long-term debt
6,510,523
4,476,865
Non-current lease liabilities
406,494
302,121
Deferred tax liabilities, net
44,444
25,989
Other long-term liabilities
55,627
49,010
Total liabilities
8,723,376
6,263,223
Commitments and contingencies
Stockholders’ equity
Class A common stock, $0.01 par value,
750.0 million shares authorized, 205.0 million issued and
outstanding as of December 31, 2023; 208.8 million issued and
outstanding as of December 31, 2022
2,050
2,088
Additional paid-in capital
1,038,530
1,170,254
Retained earnings
527,986
62,080
Accumulated other comprehensive income
71,528
55,398
Total stockholders' equity attributable
to NFE
1,640,094
1,289,820
Non-controlling interest
137,775
152,039
Total stockholders' equity
1,777,869
1,441,859
Total liabilities and stockholders'
equity
$
10,501,245
$
7,705,082
Consolidated Statements of
Operations
For the years ended December
31, 2023, 2022 and 2021
(Unaudited, in thousands of
U.S. dollars, except share and per share amounts)
Year Ended December
31,
2023
2022
2021
Revenues
Operating revenue
$
2,060,212
$
1,978,645
$
930,816
Vessel charter revenue
276,843
357,158
230,809
Other revenue
76,241
32,469
161,185
Total revenues
2,413,296
2,368,272
1,322,810
Operating expenses
Cost of sales (exclusive of depreciation
and amortization shown separately below)
877,451
1,010,428
616,010
Vessel operating expenses
45,439
63,518
51,677
Operations and maintenance
166,785
105,800
73,316
Selling, general and administrative
205,104
236,051
199,881
Transaction and integration costs
6,946
21,796
44,671
Depreciation and amortization
187,324
142,640
98,377
Asset impairment expense
10,958
50,659
—
Gain on sale of assets, net
(29,378
)
—
—
Total operating expenses
1,470,629
1,630,892
1,083,932
Operating income
942,667
737,380
238,878
Interest expense
277,842
236,861
154,324
Other expense (income), net
10,408
(48,044
)
(17,150
)
Loss on extinguishment of debt
—
14,997
10,975
Income before income from equity method
investments and income taxes
654,417
533,566
90,729
Income (loss) from equity method
investments
9,972
(472,219
)
14,443
Tax provision (benefit)
115,513
(123,439
)
12,461
Net income
548,876
184,786
92,711
Net (income) loss attributable to
non-controlling interest
(994
)
9,693
4,393
Net income attributable to
stockholders
$
547,882
$
194,479
$
97,104
Net income per share – basic
$
2.66
$
0.93
$
0.49
Net income per share – diluted
$
2.65
$
0.93
$
0.47
Weighted average number of shares
outstanding – basic
205,942,837
209,501,298
198,593,042
Weighted average number of shares
outstanding – diluted
206,481,977
209,854,413
201,703,176
Consolidated Statements of
Cash Flows
For the years ended December
31, 2023, 2022 and 2021
(Unaudited, in thousands of
U.S. dollars)
Year Ended December
31,
2023
2022
2021
Cash flows from operating
activities
Net income
$
548,876
$
184,786
$
92,711
Adjustments for:
Amortization of deferred financing costs
and debt guarantee, net
6,589
2,536
14,116
Depreciation and amortization
187,324
143,589
99,544
(Earnings) losses of equity method
investees
(9,972
)
472,219
(14,443
)
Dividends received from equity method
investees
5,830
29,372
21,365
Change in market value of derivatives
(3,204
)
(136,811
)
(8,691
)
Deferred taxes
14,938
(279,536
)
(8,825
)
Share-based compensation
1,573
30,382
37,043
Asset impairment expense
10,958
50,659
—
Earnings recognized from vessels chartered
to third parties transferred to Energos
(156,997
)
(49,686
)
—
Loss on the disposal of equity method
investment
37,401
—
—
Gain on asset sales
(29,378
)
—
—
Loss on extinguishment of debt
—
14,997
10,975
Loss on sale of net investment in
lease
—
11,592
—
Other
21,438
(14,186
)
(11,177
)
Changes in operating assets and
liabilities, net of acquisitions:
(Increase) in receivables
(41,019
)
(139,938
)
(123,583
)
(Increase) in inventories
(39,790
)
(7,933
)
(11,152
)
Decrease (increase) in other assets
41,828
(30,086
)
(1,839
)
Decrease in right-of-use assets
83,537
63,593
28,576
Increase in accounts payable/accrued
liabilities
78,065
67,741
17,527
(Decrease) in lease liabilities
(74,576
)
(63,493
)
(36,126
)
Increase (decrease) in other
liabilities
141,335
5,314
(21,251
)
Net cash provided by operating
activities
824,756
355,111
84,770
Cash flows from investing
activities
Capital expenditures
(3,029,834
)
(1,174,008
)
(669,348
)
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 sale of net investment in
lease
—
593,000
—
Sale of equity method investment
100,000
500,076
—
Asset sales
16,464
—
—
Other investing activities
9,227
(1,794
)
(9,354
)
Net cash used in investing
activities
(2,904,143
)
(82,726
)
(2,273,561
)
Cash flows from financing
activities
Proceeds from borrowings of debt
3,005,387
2,032,020
2,434,650
Payment of deferred financing costs
(37,806
)
(17,598
)
(37,811
)
Repayment of debt
(686,508
)
(1,520,813
)
(461,015
)
Payments related to tax withholdings for
share-based compensation
(9,519
)
(72,602
)
(30,124
)
Payment of dividends
(723,962
)
(99,050
)
(88,756
)
Other financing activities
(18,642
)
—
—
Net cash provided by financing
activities
1,528,950
321,957
1,816,944
Impact of changes in foreign exchange
rates on cash and cash equivalents
6,168
(3,289
)
6,541
Net (decrease) increase in cash, cash
equivalents and restricted cash
(544,269
)
591,053
(365,306
)
Cash, cash equivalents and restricted
cash – beginning of period
855,083
264,030
629,336
Cash, cash equivalents and restricted
cash – end of period
$
310,814
$
855,083
$
264,030
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229019026/en/
Investor Relations: Chance
Pipitone ir@newfortressenergy.com
Media
Relations: Ben Porritt press@newfortressenergy.com (516) 268-7403
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