New Fortress Energy Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the New Fortress Energy Court Quarter and Full Year 2020 conference call. At this time, all participants are in the listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Josh Kane from Investor Relations. Please go ahead.

Thank you. I would like to welcome you to the New Fortress Energy fourth quarter and full year 2020 earnings call. Joining me here today are Wes Edens, our CEO and chairman of the board, Chris Junta, our chief financial officer, Andrew Deedy, leading our Brazil efforts, Alav Shah, the head of Fast LNG, and Jake Sliske, who leads Xero, our renewable hydrogen division. Throughout the call, we are going to reference the earnings supplement that was posted to the New Fortress Energy website. If you've not already done so, I'd suggest that you download it now. In addition, we will be discussing some non-GAAP financial measures during the call today. The reconciliations of those measures to the most directly comparable GAAP measures can be found in the earnings supplement. Before I turn the call over to Wes, I would like to point out that certain statements made today will be forward-looking statements, including regarding future earnings. These statements by their nature are uncertain and may differ materially from our actual results. We encourage you to review the disclaimers in our press release and investor presentation regarding non-GAAP financial measures and forward-looking statements and to review the risk factors contained in the quarterly report filed with the SEC. Now, I would like to turn the call over to Wes. Great.

Thanks, Josh, and thanks, everyone, for dialing in. So, as usual, we will go through our presentation with you all here, and I've got a number of folks from the team that will pitch in a different part. There's a lot to go through this morning, but we'll try and do so in an expedited fashion, so we'll leave plenty of time for questions. So really a big quarter and a big year for us. First of all, on the operating side, operating numbers for the quarter were actually quite good, very much in line with what our expectations were. We had one terminal that was down in or one turbine that was down in Puerto Rico that was part of a scheduled maintenance item. If you X that out of it, we're basically very much right on top of all the operating numbers, and Chris will go through that in details. But solid operating numbers, and, again, the three zeros in terms of incidents and injuries and people without were all zeros. So we had a very, very solid operating quarter and feel great about that. Developments that are at the end of their – Their development time is just about ready to turn on in Mexico and Nicaragua. The punchline is very much on time and on budget. Expect in the next, you know, 30 to 45 days, both of those are essentially done and ready to go. I feel great about that. So we're, in addition to the terminals getting finished, we also announced that we won a a bid to provide 250,000 gallons a day to CFE in Baja, which is great. We've long said the organic growth from our existing portfolio was a big, big part of the story going forward. They're the biggest partner for us, not just in Baja, but in Mexico, and we look forward to partnering with them. So that terminal will turn on in May, and our power plant is ready to go at the end of June. So organically, across the board, that's all good. The big news for the quarter and the big news for the year, of course, we announced earlier. So on January 13th, we announced the acquisition of Hygo from Golar, as well as the MLP from them, a portfolio of 13 owned ships and one leased ships. The high growth transaction is really a transformational one that we'll spend some real time on. Brazil, we think, is perhaps the best market in the world. We now have really a constellation of terminals up and down the coast of it. These are very, very special terminals in that Not only are they going to be high volumes, but also good margins for us. So Andrew Deedy, who's been the point person for us, will detail this. But the way we look at those terminals, we think that at the end of the day, they're capable of generating kind of four to five times the volumes that we get from our other terminals. Not all terminals are created equal. This is just a function of the incredible size of that market and the need for gas and power. So 45 times what we think we generate from our other terminals in the portfolio at kind of 50% to 75% of the net margin. So a little bit more competitive in the marketplace. The margins are a little tighter, but the volumes could be considerably larger. So that's a big, big win for us. We acquired the portfolio to ship assets from Golar, the MLP. really less a ship acquisition than really kind of closing the gap on what we needed to provide for our own terminals. So that transaction fit us like a glove. It adds immediately $300 million or so in EBITDA, so it's a big incremental amount of cash flow for us, and it actually fills a need that we have for both FSRUs and for FSUs across the portfolio. So that is a great transaction for us. Looks like we're on schedule to close both those transactions sometime in the next 30 days or so. There's a number of different approvals that are out there, all of which are ordinary course at this point, we think. And I'd say at this point our goal is to close sometime in the first half of April, and we'll obviously update you as we get closer to that. Last topic for us and something we'll spend a lot of time on is a huge development for us. We announced yesterday that we are now FID on our first FLNG. So FLNG, this industry loves acronyms, so floating liquefiers, basically is a concept that was pioneered originally by GOLAR There's a handful of these floating liquefiers around the world, and in the transaction that we did with the MLP, we acquired a 50% interest in one of those ships, the Healy, but we have made a modification to that that we think is a faster, cheaper, better solution for it, and again, we'll spend some real time kind of going through that, but the net of it is that this actually allows us to produce our own LNG at prices well below where we can buy LNG in the marketplace, so it both solves a big challenge for us in terms of finding gas for our portfolio and also creates a massive economic opportunity by basically creating incremental margin in all of this. So we'll talk about that in some detail. So page five, if you look at kind of the detail on all this. So what I did in preparation for this call was simply went back to where we were a year ago. Now, A year ago, we were one week into this terrible pandemic, and it was pretty quiet here in the office. We went from a full office on the 11th of March to a handful of people by the 12th and 13th, and by today, the 16th, we were down to literally a skeleton crew. It was me, a handful of people, and my dog. So it was a very, very different place where we were. We had five terminals we were committed to at that point. We had the two in Jamaica that were open. The one in Puerto Rico at that point was still under construction, so it was a pretty dark time a year ago. Our total volumes at the time was about 800,000 gallons per day, operationally 1.9 million gallons that were committed, and the gas supply that we had in our portfolio then was about $5.50. So roll forward 12 months, and what a difference a year makes. We've gone from five terminals to nine terminals, so we've The four that are operating in Montego Bay, Old Harbor, San Juan, and then Sergipe, which is the terminal with the big power plant in Brazil that is operating right now. There are five developing ones, so the two, Mexico and Nicaragua, which I talked about, and then the Swape terminal that Andrew will talk about, the Bacarena terminal, again, in Brazil, and then a Southeast Asian terminal that we are committed on as well. Volumes have increased dramatically, so... 800,000 a day goes to 1.9 million. 1.9 committed goes to 5.1 million, so two and a half times bigger. Operating margin goes from basically zero or negligible to $1.2 billion a year when the terminals that are actually under development are completed. So we've taken a massive step forward as a company. And at the bottom of the page, the FAST LNG, as we call it, so rather than floating LNG, it's the FAST LNG, which I'll detail in a second here. We believe we can produce LNG between $3 and $4 in MMBTU, so a couple of dollars in MMBTU below what it is. And on the right-hand side, this is what really gets us all excited and out of bed early in the morning, is one year from now when these terminals are all on, we've got the nine we're committed to. There's two that we are very, very close to being FID on, so it'll take us to 11. That takes our volumes up to 19.3 million gallons per day, so a far cry from the 800,000 we were producing a year ago. Operating margin, if we continue to buy in gas at the market, $1.6 billion. And to the extent that we can also then produce... our own LNG across the whole portfolio, it adds roughly a billion dollars in earnings. So it's a huge transformation for us as a company. We really are in really the last stages of moving from being a development company to an operating company. You can see that the impact of this across the portfolio is really tremendous. So let's look at the next section. We look at page seven. The graphic, the visual of the planet with our different operations spread around I think is a compelling one. Obviously, we started in the Caribbean, so there's the Jamaica, Puerto Rico terminals. Then you're in Mexico and Central America. Now with Brazil, we'll have four terminals in total across there. It's a continent-sized country. It's a huge market for us, biggest market we're in by far. You see that big blue ship that is off the coast of West Africa. That's the Healy, which is, again, this 2.4 million ton floating LNG ship that we own a 50% interest in. Then there's FSRUs in the Middle East, in Southeast Asia. We're very close to announcing our first deal in Southeast Asia, so it really has gone from a regional company to a global company, and that creates massive, massive synergies and opportunities for us. On page number eight, we just showed the different terminals. So the four that you're on the left-hand side, Montego Bay, Old Harbor, San Juan, then the Sergipe portfolio, this is the terminal that actually has the 1.5 gigawatt power plant that we also acquired as part of the HIGO. It's the largest power plant in Latin America, so a very, very significant asset that really anchors that terminal. The two that are in construction in the middle of the page here, La Paz and Nicaragua, are literally days away from being 100% completed. And then on the right-hand side, we've got the Swape Terminal, Bacarena, and then the Southeast Asia Terminal. And if you flip to page number nine, the two that we expect additional FIDs in the next 90 to 120 days, there's a large offshore terminal in Santa Catarina, Brazil, and then a terminal we've been working on for quite some time in Shannon, Ireland. We're filing our final planning papers on that at the end of this month that we expect to be FID on that sometime in the middle of the year. So with that, let me pause and turn it over to Andrew Didi. Andrew, as I said, is the person who's the point person for us in Brazil, and I think he can give us some great color on what's going on down there. Andrew?