New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Q2 2019 Earnings Presentation
43 slides from New Fortress Energy's earnings presentation, August 2019
Slide 1: Q2 2019 Investor Presentation
New Fortress Energy OQ2 2019 Investor Presentation August 2019 g NewFortress energy
Slide 2: Executive Summary
Executive Summary Q2 2019 Company Highlights Transforming from a Jamaica projects expected to reach Run Rate')in Q1 2020 Development Company Puerto Rico projects expected to be online in Q4 2019 and reach Run Ratein Q2 2020 Inlvoe-TaNO)J-Ie-ile ROU eINAY + Mexico projects expected to be online in Q2
Slide 3: Transforming from a Development Company into an Operating Company
Q transforming from a Development Company into an Operating Company Qéxccuting Projects On Time and At Budget") O continuing to Build Out Commercial Pipeline Q demonstrating Operational Excellence @mplementing Financial Initiatives
Slide 4: Volume Growth
@Transforming from a Development Company into an Operating Company Volume Growth"2) Our goal is to rapidly turn on Committed Volumes over the next 6 quarters 2,560 2,573 2,196 1,918 1,175 465 282 287 305 314 320 378 — a 1-18 02-18 03-18 4-18 ar-19 02-19 03-19 4-19 1-20 02.20 03-20 4-20 ™ Miami m™Mon
Slide 5: Illustrative Operating Margin Goal Overview
@Transforming from a Development Company into an Operating Company Illustrative Operating Margin Goal Overview'4.15) As Committed Volumes come online, revenue & Illustrative Operating Margin are expected to increase substantially Mexico coming online Puerto Rico + Jamalco CHP reach Run Rate 4 $394 $
Slide 6: Executing Projects On Time and At Budget
Q transforming from a Development Company into an Operating Company Oéxecuting Projects On Time and At Budget © continuing to Build Out Commercial Pipeline Q demonstrating Operational Excellence @mplementing Financial Initiatives
Slide 7: Terminals are Gateways for Energy
@ Executing Projects On Time and At Budget Terminals are Gateways for Energy [ 95%+ of our Committed Volumes flow through four assets”) ] —— ; FA a Da SS we Montego Bay, Jamaica Old Harbour, Jamaica San Juan, Puerto Rico Product Onshore (Landed) Offshore Hybrid Hybrid (+) Ownership'"®) NFE 100% NFE
Slide 8: Our Terminals Connect Downstream Assets
@ Executing Projects On Time and At Budget Our Terminals Connect Downstream Assets All of our Committed Volumes come from 5 projects and 30 other customers". 22) 2%) ; r nest =: o — g i Di Du Bo. Old Harbour Jamalco n Juan 5&6 La Solutions 25 MW add-on to 120 . . 190 MW power plant 150 MWpower plant
Slide 9: Adding Downstream Assets to Our Terminals
@ Executing Projects On Time and At Budget Adding Downstream Assets to Our Terminals Grow demand by developing large scale and small scale customers - Power plants and data centers require constant availability and supply of feed gas for fuel - Incremental, bolt-on volumes typically come with attrac
Slide 10: Continuing to Build Out Commercial Pipeline
Q transforming from a Development Company into an Operating Company Oeéxccuting Projects On Time and At Budget © continuing to Build Out Commercial Pipeline Q demonstrating Operational Excellence @mplementing Financial Initiatives
Slide 11: Global Portfolio of Irreplaceable LNG Terminal Infrastructure
@Continuing to Build Out Commercial Pipeline Global Portfolio of Irreplaceable LNG Terminal Infrastructure Expected : Committed In Discussion _ : : First Gas Asset Description Region Commitment Volumes Volumes > 27) Date Datel”) (gal/d) (gal/d) B Onshore terminal that supplies the 145 a36k 199k lont
Slide 12: Significant Operating Leverage
@Continuing to Build Out Commercial Pipeline Significant Operating Leverage - Once terminals are built we can add customers to the network and sell multiples of our baseload volume Minimal capital required to bolt on new retail customers at higher margins once the terminal is established Simply runn
Slide 13: Demonstrating Operational Excellence
Q transforming from a Development Company into an Operating Company Oeéxccuting Projects On Time and At Budget © continuing to Build Out Commercial Pipeline Q Demonstrating Operational Excellence @mplementing Financial Initiatives 12
Slide 14: Operations Highlights - Q2 2019 Key Indicators
@Demonstrating Operational Excellence Operations Highlights - O2 2019 Key Indicators In 2019, our customers will reduce their emissions by ~30%, the equivalent of planting 6 million trees2®) Achieved “three zeros” for HSE incidents(°) Health, Safety, & Y Zero (0) days away from work incidents Enviro
Slide 15: Current LNG Market Provides Earnings Uplift Opportunity
@Demonstrating Operational Excellence Current LNG Market Provides Earnings Uplift Opportunity Opportunity to Buy Into Attractive Market Low LNG Price Environment®”) —JKM ——GCM = = Model - Today's depressed market for LNG is prime for purchasing our remaining LNG supply needs + ~50% of Committed Volu
Slide 16: Implementing Financial Initiatives
Q transforming from a Development Company into an Operating Company Oeéxccuting Projects On Time and At Budget © continuing to Build Out Commercial Pipeline Q demonstrating Operational Excellence @mplementing Financial Initiatives 15
Slide 17: Operating Results
@ Implementing Financial Initiatives Operating Results Revenue increased by $13.0mm year over year driven by increased volumes through the Montego Bay and Old Harbour terminals Operating margin was ($9.7)mm due to high COGS on account of burning off the remainder of our spot priced cargo in addition
Slide 18: Our Financial Goals
Jamalco CHP Financing Terminal Financing Liquefier Financing’?7) Incremental Borrowing Capacity @ Implementing Financial Initiatives Our Financial Goals Fully underwritten commitment for $180mm in bonds placed in Jamaica secured by Jamalco CHP (non-recourse asset level) Our goal is that terminals un
Slide 19: Jamalco CHP Financing
@ Implementing Financial Initiatives Jamalco CHP Financing On August 11, NFE and NCB Capital Markets executed a commitment letter for $180mm ] Key Terms Security Package - $180mm non-recourse debt financing in 2 - Financing is secured by the Jamalco CHP Plant tranches: and its two 20-year revenue ge
Slide 20: Valuation Drivers
Strong Market Opportunity Potentially Significant Margins Significant Competitive Advantage @ Implementing Financial Initiatives Valuation Drivers NFE services a market with massive potential demand as customers transition from oil-based fuels to a combination of natural gas and renewables Returns a
Slide 21: We Believe Our Assets Hold Tremendous Potential Value
We Believe Our Assets Hold Tremendous Potential Value @ Implementing Financial Initiatives Significant Valuation Upside Potential Illustrative Valuation Analysis Illustrative Operating Margin Goal of ~$395mm based on Committed Volumes A 15x multiple would lead to an Implied Illustrative Share Price’
Slide 22: Appendix
Appendix
Slide 23: Montego Bay Terminal Layout & Asset Overview
Appendix Terminal Layout & Development Photos Asset Overview?) — Onshore LNG regas terminal, on- site storage and truck loading facility Trugke Loa pf In Service Q4 2016 740k gal/d 7,000 m3 Asset Map Peres berate >< 22
Slide 24: Old Harbour Terminal Layout & Asset Overview
Appendix Terminal Layout & Development Photos Asset Overview Offshore terminal, FSRU and natural gas pipelines In Service Q1 2019 émm gal/d 125,000 m* 4.8mm Dolphins Asset Map Jamaica @ Terminal Location 23
Slide 25: San Juan Facility Layout & Development Photos
Appendix Facility Layout & Development Photos 4-Bay Truck Loading Manifold Suction A Drums 30k m' 4 Q2-18: site pre-development y ae € Q2-19: site cleared for civil work Asset Overview Onshore multi-fuel handling facility with truck loading capabilities Under Construction Q4 2019 2.7mm gal/d 30,000
Slide 26: La Paz, Mexico Terminal
Appendix La Paz, Mexico Terminal”) Terminal Layout & Development Photos Asset Overview Can accommodate FSUs ranging Onshore terminal with truck loading Description capabilities and integrated ~100 MW power plant Under Construction Q2 2020 1.1mm gal/d construction updates coming soon Terminal Locatio
Slide 27: Jamalco CHP Plant
Appendix Jamalco CHP Plant”) Asset Layout & Development Photos Asset Overview Pipeline Combined heat & power plant Interconn Description providing ~100MW of baseload power and ~50MW of steam power First Gas Q4 2019 Back eta ADO Storage acity Volume off the road Asset Map =< x ~~ i AS 2 = = @ Jamalco
Slide 28: LNG has Significantly Improved Jamaica's Economic Stability
Appendix LNG has Significantly Improved Jamaica's Economic Stability") Share of total average base load Impact of LNG by the numbers) Before NFE®?) After NFE®?) ~$250mm/yr 0% NaturalGas | 72% savings from gas ~5.1% GDP 2 notches ' Increase in credit rating (Caa2>B3) 3% Renewables t 12% of 460 bps ~3
Slide 29: Environmental & Social Governance
Appendix Environmental & Social Governance We are passionate about improving the lives of people around the world Bringing educational and environmental programs to communities in which we operate Scholarships & Bursaries Entrepreneurship Environmental Protection STEM Programs 28
Slide 30: Operating Margin Reconciliation
Appendix Operating Margin Reconciliation (in thousands) Q2-18 a1-19 2-19 Net income/(loss) $ (18,825) $ (60,292) $ (51,233) Add: Selling, general and administrative 15,535 49,749 32,169 Depreciation and amortization 732 1,691 2,110 Interest expense 1,603 3,284 6,199 Other (income) expense, net (199)
Slide 31: Disclaimers
Disclaimers IN GENERAL. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the “Presentation.” FORWARD-LOOKING STATEMENTS. Certain statements regardi
Slide 32: Endnotes
Endnotes (1) “Run Rate” means the status of a project at which management currently estimates the initial ramp-up of operations on a particular facility will be over, and full commercial operations will be running at a sustainable level. There is a particular date and volumes associated with the Run
Slide 33: Endnotes
Endnotes (4) The MOUs referenced are non-binding memorandums of understanding. We cannot assure you if or when we will enter into binding definitive agreements for the sales of volumes under non-binding term sheets. (5) “Committed Volumes" or references to Commitments means our expected volumes to b
Slide 34: Endnotes
Endnotes (8) “Reliability’ means the percentage of time the facility is in service without planned or unplanned downtime for our Montego Bay Facility, Miami Facility and Old Harbour Facility. There can be no assurance that other facilities, future facilities or the same facilities over a different t
Slide 35: Endnotes
Endnotes (12) "Volume Growth” shows the growth in Committed Volumes at each facility as of each historical period shown and management's expectations regarding Committed Volume growth in future periods. For more information about Committed Volumes please see the definition in these endnotes. (13) "A
Slide 36: Endnotes
Endnotes (16) “Illustrative Annualized Operating Margin Goal” or “Annualized Operating Margin Goal” means, as presented on a run rate basis, the volumes of LNG that we have historically produced, delivered and sold (in the case of historical information), that we expect to sell based on expected vol
Slide 37: Endnotes
Endnotes (17) The images of our projects in Puerto Rico, La Paz, Mexico, Angola, Ireland and Pennsylvania, and the images of the Coral Anthelia and the Coral Encanto represent renderings of final projects which are Under Construction or In Discussions, so are not complete or final. (18) NFE has the
Slide 38: Endnotes
Endnotes (25) “In Discussion Volumes", references to In Discussion or similar words refer to expected volumes to be sold to customers for which (i) we are in active negotiations, (ii) there is a request for proposals or competitive bid process underway or which we have won, or (iii) we anticipate a
Slide 39: Endnotes
Endnotes (28) This estimate is based on management's assumptions and percentage calculations regarding previous diesel consumption and future natural gas consumption, based on natural gas and LNG sold through June 30, 2019, and management's estimates and assumptions about natural gas and LNG that wi
Slide 40: Endnotes
Endnotes (33) ‘Total Debt’ means the aggregate principal amount of the New Term Loan Facility in the “Debt” footnote to the financial statements provided in our forthcoming quarterly report on Form 10-0 for the period ended June 30, 2019, or the equivalent for those periods prior to our becoming pub
Slide 41: Endnotes
Endnotes (39) ‘Potential Incremental Borrowing Capacity” means the capacity to execute additional financing initiatives based on an assumed Senior Secured Leverage Ratio of 3.5x. Itis calculated by multiplying the Senior Secured Leverage Ratio of 3.5x by the relevant Illustrative Annualized Operatin
Slide 42: Endnotes
Endnotes (44) “Premium” is calculated by dividing the Implied Illustrative Share Price by the NFE share price of $11.64 as of market dose on August 7, 2019. This information is provided for illustrative purposes only and is not intended to be a projection in any respect. (45) The public company info
Slide 43: Endnotes
Endnotes (52) For information about Jamaica's situation prior to the introduction of LNG, see the Annual Report of JPS issued in 2014. (53) The percentages illustrated represent NFE's internal estimate and expectations for Jamaica's energy consumption by fuel for the full year 2021 based on informat