New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Q4 2022 Earnings Presentation
40 slides from New Fortress Energy's earnings presentation, February 2023
Slide 1: Q4 2022
February 2023 O4 2022 NewFortress energy
Slide 2: Agenda
. Executive Summary . LNG Market Update . Commercial Update . FLNG Update . Financial Results . Appendix
Slide 3: Executive Summary: 2022 was a record year
Executive Summary 2022 was a record year for our company Achieved Adjusted EBITDA” of $239mm for Q4 2022 and ~$1.1bn for the year FY'20 FY'21 FY'23 Q1-22 Q2-22 O3-22 Q4-22 Achieved Adj. EBITDA(2) Total Segment $125 $746 Illustrative $301 $327 $339 $283 of ~$1.1bn for 2022 Operating Margin) Goal!) (.
Slide 4: Recent notable business highlights
Executive Summary Recent notable business highlights Our business continues to grow globally and leverages key opportunities Signed PREPA™) contract through GeneraPR to take over operations, maintenance & fuel supply for Puerto Rico's power system + 3,600MW, 10 baseload units Nearing completion of B
Slide 5: 2022 was a volatile year for LNG prices
Executive Summary 2022 was a volatile year for LNG prices Prices have “normalized” roughly in line with other fuels 2022 was a record year of LNG_prices have-“normalized”, volatility.in. LNG markets(’) converging with other fuel markets!) 75 75 historical prices 65 65 55 45 ” & 245 = 35 ~$17.00/MMBt
Slide 6: Our primary goals for 2023
Executive Summary Our primary goals for 2023 Continue to build our Complete & deploy) first FLNG liquefier'’2) Nearly doubling supply & demand while maintaining minimal unsold volumes May June July e e e > Mechanical Onshore Offshore installation & TBtu completion® & commissioning & commissioning fi
Slide 7: Agenda
. Executive Summary . LNG Market Update . Commercial Update . FLNG Update . Financial Results . Appendix
Slide 8: LNG Market Update
LNG Market Update In 2022, energy markets were unbalanced with Russian supply offline Historically high LNG prices. in 2022 LNG.prices.have.stabilized.significantly-higher Extreme volatility reflecting a tightly balanced global market Global competition for LNG has returned at these levels $70 $70 A
Slide 9: 2023: Return to term contracts, global distribution
LNG Market Update 2023: Return to term contracts, global distribution High prices resulted in fuel switching away from gas; Sustained reduction in supply with no near-term now prices for fuels have converged increase to compensate $70 ad 12 $60 Convergence of fuel (96) fe | prices globally > Russian
Slide 10: Agenda
. Executive Summary . LNG Market Update . Commercial Update . FLNG Update . Financial Results . Appendix 10
Slide 11: Downstream LNG demand largely matched to gas supply
Commercial Update Our downstream LNG demand is largely matched to our gas supply Supply portfolio is substantially contracted”) through our downstream terminals, with some incremental supply for new business 80% of 2023 LNG supply is contracted'”)to downstream customer. 2021 2022 | 2023 | 2024 2025
Slide 12: Demand through our terminals is robust and growing
Commercial Update Demand through our terminals is robust and growing 2022E(9) 2023E(%) 2024E9) Market (TBtu) (TBtu) (TBtu) = 1 Puerto Rico 15 45 58 ~175 TBtu >< 2 Jamaica 23 27 28 5 expected | 3 Mexico 2 5 18 demand from existing a : = 4 ~~ Nicaragua 2 2 19 terminals > 5 Barcarena - - 25 6 Santa Cat
Slide 13: Agenda
. Executive Summary . LNG Market Update . Commercial Update . FLNG Update . Financial Results . Appendix 13
Slide 14: FLNG Update
FLNG Update MK VIN IN 14
Slide 15: Final modules to be integrated onto rigs by end of March
FLNG Update Final modules to be integrated onto rigs by end of March(12) Gas treatment module 1 Gas treatment module 2
Slide 16: Less than days until FLNG sets sail
FLNG Update Less than 100 days until FLNG 1 sets sail With construction nearing completion”), we are focused on installation & operational readiness Required construction permits received * Offshore work to be completed before FLNG 1 arrives Utilities (Rig 3) * Pipelay commencing imminently (constru
Slide 17: Gearing up for commissioning & installation of first FLNG unit
FLNG Update We are gearing up for commissioning & installation‘) of our first FLNG unit As construction nears completion), we expect to commission the facility and be operational by July'2) Commissioning & installation timeline''?) Key upcoming milestones('2) May June July May L J I oe e e 1 Mechani
Slide 18: Agenda
. Executive Summary . LNG Market Update . Commercial Update . FLNG Update . Financial Results . Appendix 18
Slide 19: Record $1.1bn of Adjusted EBITDA for FY 22
Financial Results Record $1.1bn of Adjusted EBITDA for FY 2022 Q4 2021 | 042022 YoYA YE 2021 | YE2022 | YoYA Total Seg. Revenue ($mm) $808 $564 ($244) $1,696 | $2,613 $917 Total Seg. Op. Margin’) (mm) $373 | $283 | ($90) $746 | $1,250 | $504 * $239mm of Adj. EBITDA for Q4 2022: we achieved (-) Core
Slide 20: Added significant flexible liquidity to our balance sheet
Financial Results We have added significant flexible liquidity to our balance sheet Our upsized working capital facilities significantly fortify our balance sheet in tandem with earnings growth increased to approx. $750mm increased to $325mm * Interest rate of SOFR + ~265 bps provides NFE * From a s
Slide 21: Geographic diversity, credit-worthy counterparties, predictable cash flow
Geographic Credit-worthy Predictable cash flow Disciplined diversity counterparties with duration Capex plan
Slide 22: Key operational highlights
Financial Results Key operational Algniights Asset reliability from our customers after meeting required nominations 99% reliability'>) during Q4 across our 5 major terminals Maintained operational uptime while accomplishing scheduled maintenance during Q4 by implementing Learning Management System
Slide 23: Agenda
. Executive Summary . LNG Market Update . Commercial Update . FLNG Update . Financial Results . Appendix 23
Slide 24: Our vessel portfolio meets current marine needs
Appendix Our vessel portfolio meets current marine needs, with room for growth We own or control 29_vessels Fully covered on all marine infrastructure needs through 2025+ growth plan FSRUs FSUs Transport vessels FID) on Celsius FSRU FID‘® on Penguin FSU conversion for Barcarena, co ion for FLNG 1, d
Slide 25: Earnings uplift from ships cost reductions
Appendix Earnings uplift ~$106mm $3.00 $2.67 $2.55 $2.50 $2.00 $1.62 $1.50 $1.00 $0.50 $0.00 Base Reduce Ships and Sub-Charter 2022 t J Run-rate 2023 Charter Payments m™Bunkers Cost m™Boil Off Cost mPort Fees / STS Costs
Slide 26: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) FY'20 FY'21 Q1 2022 Q2 2022 Q3 2022 042022 Net (loss) income ($263,965) $92,711 $241,181 ($178,431) $56,231 $65,805 Add: Interest expense (net of interest income) 65,723 154,324 44,916 47,840 63,588 80,517 ‘Add: Tax provision (benefit) 4,817 12
Slide 27: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) FY'20 FY'21 Q1 2022 Q2 2022 Total Segment Operating Margin $125,302 $746,430 $300,083 $327,448 Less: Core SG&A 91,980 137,144 40,960 42,040 Less: Pro rata share of Core SG&A from unconsolidated : - 4,726 1,390 1,914 entities Adjusted EBITDA (no
Slide 28: Adjusted EBITDA: SG&A
(in thousands of U.S. dollars) Total Selling, general and administrative Core SG&A SG&A items excluded from Core SG&A Appendix Adjusted EBITDA Fy’20 FY'21 Q1 2022 Q2 2022 $120,142 $199,881 $48,041 $50,310 91,980 137,144 40,960 42,040 28,162 62,737 7,081 8,270 Q3 2022 $67,601 47,290 20,311 Q4 2022 $7
Slide 29: Segment operating margin reconciliation FY2022
Appendix Segment operating margin reconciliation Year Ended December 31, 2022 (in thousands of $) cone Ships) Total Segment Sonsdlidationand Consolidated Total revenues 2,168,565 444,616 2,613,181 (244,909) 2,368,272 Cost of sales 1,142,374 - 1,142,374 (131,946) 1,010.428 Vessel operating expenses -
Slide 30: Segment operating margin reconciliation Q4 2022
Appendix Segment operating margin reconciliation Three Months Ended December 31, 2022 Terminals and Consolidation and (in thousands of $) inci Ships (1) Total Segment Other’) Consolidated Total revenues, 457,324 106,990 564,314 (17,945) 546,369 Cost of sales 232,436 - 232,436 (96,537) 135,899 Vessel
Slide 31: Segment operating margin reconciliation Q3 2022
Appendix Segment operating margin reconciliation Three Months Ended September 30, 2022 Consolidation (in thousands of $) Terminals and Infrastructure (1) Ships (2) Total Segment and Other (3) Consolidated Total revenues 687,437 111,660 799,097 (67,167) 731,930 Cost of sales 402,458 - 402,458 (8,628)
Slide 32: Segment operating margin reconciliation Q2 2022
Appendix Segment operating margin reconciliation Three Months Ended June 30, 2022 Consolidation (in thousands of $) Terminals and Infrastructure (1) Ships (2) Total Segment and Other (3) Consolidated Total revenues 543,455 111,024 654,479 (69,624) 584,855 Cost of sales 271,948 - 271,948 453 272,401
Slide 33: Segment operating margin reconciliation Q1 2022
Appendix Segment operating margin reconciliation Three Months Ended March 31, 2022 (in thousands of $) rerminalsand Ships TotalSegment Consolidation Consolidated Total revenues 480,349 114,942 595,291 (90,173) 505,118 Cost of sales 235,532 - 235,532 (27,234) 208,298 Vessel operating expenses 3,492 2
Slide 34: Segment operating margin reconciliation FY2021
Appendix Segment operating margin reconciliation Year Ended December 31, 2021 Terminals and Consolidation (in thousands of $) Infroctracturet) SHIPS Total Segment “SV Othe Consolidated Total revenues 1,366,142 329,608 1,695,750 (372,940) 1,322,810 Cost of sales 789,069 - 789,069 (173,059) 616,010 Ve
Slide 35: Segment operating margin reconciliation FY2020
Appendix Segment operating margin reconciliation Year Ended December 31, 2020 Terminals and Consolidation (in thousands of $) Infroctracturet) Ships) Total Segment “7 Girerg) Consolidated Total revenues 451,650 - 451,650 - 451,650 Cost of sales 278,767 - 278,767 - 278,767 Vessel operating expenses -
Slide 36: Adjusted Net Income & Adjusted EPS
Appendix Adjusted Net Income & Adjusted EPS (in thousands of U.S. dollars except for YTD 2020 ©42021~=—S- YTD 2021 a1 2022 22022 3.2022 04 2022 YTD 2022 share amounts) Nos aeaaaataeaiaeacaiaal (182,147) 150,857 97,104 238,269 (169,765) 61,848 64,127 194,479 Contract termination charges and loss on 1
Slide 37: 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: All statements contained i
Slide 38: Endnotes
Endnotes “Illustrative Adjusted EBITDA Goal” is based on the “Illustrative Total Segment Operating Margin Goal" less illustrative Core SGA assumed to be at $180mm for all periods 2023 onward including the pro rata share of Core SG&A. from unconsolidated entities, “llustrative Total Segment Operating
Slide 39: Endnotes
10. Endnotes “Total Segment Operating Margin’ is the total of our Terminals and Infrastructure Segment Operating Margin and Ships Segment Operating Margin. "Terminals and Infrastructure Segment Operating Margin” includes our effective share of revenue, expenses and operating margin attributable to o
Slide 40: Endnotes
iW. 12. 13. 14, 15. 16. 17. 18. Endnotes Refers to potential customers (i) with whom we are in active negotiations, (i for whom there is a request for proposals or competitive bid process, or (il for whom we anticipate a request for proposals or competitive bid process will soon be announced based o