New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Q4 2019 Earnings Presentation
36 slides from New Fortress Energy's earnings presentation, March 2020
Slide 1: Q4 2019 Earnings Presentation, March 2020
March 2020 Q4 2019 NewFortress energy
Slide 2: We want to light the world
We want to light the world. Billions of people around the planet lack access to affordable power. Electricity should not be a luxury good. Our mission is to provide capital, expertise and vision to address this problem while also making positive and meaningful impacts on communities and the environm
Slide 3: Agenda
1. Executive Summary 2. Terminal Developments & Operations Financial Performance Fw Low Carbon to No Carbon 5. Appendix
Slide 4: Q4 2019 Highlights
Executive Summary Q4 2019 Highlights Positive Operating Margin"): Transformation from a development company to an operating company is complete 4 Assets In Operation'?): Montego Bay Terminal, Old Harbour Terminal, Jamalco CHP, and San Juan Facility 3 } 2 New Terminals In Construction): La Paz, Mexic
Slide 5: The Business
Executive Summary The Business [ NFE develops and operates a global portfolio of irreplaceable LNG terminal infrastructure - Terminals are the “portals” for us to bring LNG and power to countries around the world - Our focus is on those regions that have: * Large populations and economies * Ineffici
Slide 6: Terminals
Executive Summary Terminals The Backbone of Our Business... ...is a Vast & Diverse Portfolio of Terminals - We have 5 terminals currently Committed(4) (volume in GPD) Capacity’) Volume Montego Bay 740k 402k Old Harbour 6,000k 760k - With a strong foundation in the Caribbean, NFE is Puerto Rico 2,700
Slide 7: The Math
Executive Summary The Math [ A portfolio of 20 terminals should generate $2bn to $9bn in Illustrative Operating Margin'?) ] - We believe on average, each terminal will process between 1mm to 3mm gallons per day of LNG‘) - Our goal is to build a portfolio of 20+ terminals around the world'%; we curre
Slide 8: The Update
Executive Summary The Update 4 customers represent ~90% of our average Committed Volume”) in 2020 } Bogie i T" Old, Harbour power _ Jamalco San Juan power powerplant plant CHPiplant plant Total 145 MW 190 MW 150 MW 440 MW —> oE MW 310k GPD 380k GPD 265k GPD 863k GPD 1.818k GPD - All of these project
Slide 9: Our Goals
Become one of the world’s largestIPPs Zero. a in 10 years Executive Summary Our Goals(13) 20+ _— 1-3mm ~~ 1mm = 400mw terminals GPD, each GPD 8cw-24cw - ~$2-$9bn Operating Margin Today, we deliver low-carbon, natural gas-fired power. Tomorrow, we aim to be one of the world’s largest emissions-free I
Slide 10: Terminal Developments & Operations
Fw . Executive Summary Terminal Developments & Operations Financial Performance Low Carbon to No Carbon Appendix 10
Slide 11: Key Assets Operational
Terminal Developments & Operations Key Assets Operational f Volumes from these 4 operational assets are >95% of 2020 Committed volumes Montego Bay Terminal Old Harbour Terminal(™ Jamalco CHP San Juan Facility Status Operational Operational Operational Commissioning Run Rate Achieved Achieved Achieve
Slide 12: Key Developments in Process
Terminal Developments & Operations Key Developments in Process Similar to San Juan Facility Similar to Old Harbour Terminal Status Construction Pre-Construction First Gas Q4 2020 Q2 2021 pe ee ee eee eee eee eee nee eee eee eeeeeene, H 1 Volumes 455k GPD 745k GPD
Slide 13: Fast Track Power
oa Terminal Developments & Operations Fast Track Power''5) The world is under-electrified and customers want power now Global Electricity Access MWh per Capita @ >10Mwh @ 5-10 mMwh @ 255 Mwh @ 1-25MWh @ <imw No data x 4 i 200 MW - 300 MW of dema 12-18 months }
Slide 14: Operational Asset Performance
Terminal Developments & Operations Operational Asset Performance Achieved “three zeros” for HSE incidents for operating assets\") Y Zero (0) days away from work incidents Y Zero (0) recordables for health or process safety Health, Safety, & Environment (“HSE”) ¥ Zero (0) spills or environmental cont
Slide 15: Financial Performance
- Ww . Executive Summary Terminal Developments & Operations . Financial Performance Low Carbon to No Carbon Appendix 15
Slide 16: Financial Performance
Financial Performance Financial Performance Operating Results Financial Metrics - Volumes: up ~200k GPD or ~64% from Q3 due to increased Old Harbour terminal throughput Q3 Q4 2019 2019 Ch - Revenue: up by $20.1mm from Q3 primarily Volumes Sold, Average (kGPD) 314 329 538 209 driven by Old Harbour te
Slide 17: New Term Loan Provides Liquidity for Committed Projects
Financial Performance New Term Loan Provides Liquidity for Committed Projects Overview of $800mm Term Loan Fortified Balance Sheet Improved Liquidity Position: ~$403.6mm of pro forma Cash on Hand,22) coupled with Operating Margin funds the expected cost of developments including Mexico and Nicaragua
Slide 18: Depressed LNG Market...
Financial Performance Depressed LNG Market... [ The sharp drop in LNG prices creates a large opportunity - In 2019, significant oversupply caused spot prices to fall ~70% and term LNG market prices to fall ~50%'26) - This depressed market for LNG is prime for purchasing NFE’s remaining LNG needs - E
Slide 19: ...Creating Upside
Financial Performance ...Creating Upside Current market prices can provide material Illustrative Operating Margin Goal uplift - NFE is currently advantaged with a net open exposure of over 1,000 TBtul2) from our customer contracts - Atcurrent spot LNG prices of ~$2.50/MMBtu®® this would translate to
Slide 20: Illustrative Operating Margin Goal from Committed Volumes
Financial Performance Illustrative Operating Margin Goalls*) from Committed Volumes [ As Committed Volumes become operational, revenue & Illustrative Operating Margin Goal are expected to increase substantially Illustrative Annualized Operating Margin Goal $441 <p) 388 $350 s $475 $7 Q1-20 Q2-20 Q3-
Slide 21: Low Carbon to No Carbon
BR & . Executive Summary Terminal Developments & Operations Financial Performance Low Carbon to No Carbon Appendix 21
Slide 22: Low Carbon to No Carbon
Low Carbon to No Carbon emissions within 10 years for our planet o.° = oe TF = R Green hydrogen %e%% fm im O yarog Zero carbon. Zero emissions. All good. Most abundant element in the universe Doesn't exist naturally by itself Made with renewable energy Costs of production falling rapidly 22
Slide 23: Green hydrogen
Low Carbon to No Carbon Green hydrogen is made from water and has Renewables + electrolysis create truly zero emission, zero carbon green hydrogen ~ FF ra Hydrogen ‘Oxygen Huge potential to replace diesel with natural gas Ournew division is solely focused on this opportunity oe — 330 2 2 RO 23
Slide 24: Our Path to Zero
Low Carbon to No Carbon Our Path to Zero * We will fund projects that take us from low carbon to no carbon. * Our goal is to develop our first proof of concept in the next 12 months. How can you get involved? Submit proposals to YEA zero@newfo rtressenerg y.com rgy.com/zero 24
Slide 25: Appendix
Fw . Executive Summary Terminal Developments & Operations Financial Performance Low Carbon to No Carbon Appendix 25
Slide 26: Operating Margin Reconciliation
Appendix Operating Margin Reconciliation (in thousands) Q4-18 Q3-19 Net income/(loss) $ (34,763) $ (54,424) $ Add: Selling, general and administrative 21,310 40,913 30,091 Loss on mitigation sale . . 5,280 Depreciation and amortization 1,063 1,930 2,209 Interest expense 4,859 4,974 4,955 Other (inco
Slide 27: Protecting & Preserving the Environment
Appendix Protecting & Preserving the Environment'?®) With every customer we convert from oil-based fuels to LNG, we're making significant improvements for the environment. Oo © 10mm 30% 145k: annual trees reduction in customers’ annual cars off planted equivalent CO, emissions road equivalent 27
Slide 28: Community investment
Over USD given in scholarships Appendix children provided with financial aid students attended back-to-school fairs Over USD invested in technical training USD given in STEM programs students and entrepreneurs provided with business training 28
Slide 29: 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 30: Endnotes
Endnotes (1) "Operating Margin" is a non-GAAP financial measure. For a reconciliation of Operating Margin as well as an explanation of this measure, please see the Appendix to this Presentation. As used in this Presentation, Operating Margin means the sum of (i) Net income / (loss), (ii) Selling, ge
Slide 31: Endnotes
Endnotes (6) “Capacity” refers to the technical, regulatory or physical limitation on our facility's volume capacity, which could be physical or permissioned capability to deliver LNG to the facility, landed or floating storage capacity at the facility, the loading or unloading rate of LNG or natura
Slide 32: Endnotes
Endnotes (11) “Committed Volumes” or references to Commitments means our expected volumes to be sold to customers under binding contracts as of the period specified in the Presentation, or if no period is specified, as of March 2, 2020 for the volumes we expect to be sold during the calendar year en
Slide 33: Endnotes
Endnotes (13) "Illustrative Annualized Operating Margin” and “Illustrative Annualized Operating Margin Goal”. Because we are not currently profitable, we are providing you the Illustrative Annualized Operating Margin that we aspire to achieve. This goal represents the product of (1) the relevant Tar
Slide 34: Endnotes
Endnotes (19) These metrics reflect our entire operating history through February 17, 2020. These metrics are tracked by management through formal reporting systems and informal escalation paths. There can be no assurance that we will achieve similar results in the future and future results could di
Slide 35: Endnotes
Endnotes (30) Based on Platts LNG Daily Report on March 3, 2020 for DES Mediterranean Marker MED (Apr, H1 Apr and H2 Apr), FOB Gulf Coast Marker GCM (Apr, H2 Mar, H1 Apr, and H2 Apr) and DES Northwest Europe Marker NEW (Apr, H1 Apr, H2 Apr and H1 May). (31) "Contracted Supply” refers to the amount o
Slide 36: Endnotes
Endnotes (35) “Average Volume (GPD)’ refers to the average number of LNG gallons sold per calendar day over the period indicated (or illustrated as being sold in the case of future periods). (36) These metrics are estimates is based on management's assumptions and percentage calculations regarding a