New Fortress Energy Inc.

gentlemen, and thank you all for joining us for this NFV first quarter 2023 earnings conference call. As a reminder, all lines are in a listen-only mode, but later you will have the opportunity to ask questions. To get us started with opening remarks and introductions, I am pleased to turn the floor to Mr. Patrick Hughes with Investor Relations. Welcome, sir.

Thank you, Jim, and good morning, everyone. Thanks for joining today's conference call, during which we will discuss our first quarter 2023 results. NFE's recent development and operational highlights and what continues to be a very bright future for our business. As Jim said, the call is being recorded and will be available by replay on the investor section of our website under the subheading events and presentations. And in fact, at that same location on our website, you'll find a press release regarding our first quarter 2023 results and the corresponding presentation that we'll walk through on today's call. As we proceed through the discussion with Wes and the team, we'll be referring to that presentation, and in that same presentation, you'll also find a series of important disclosures related to forward-looking statements and non-GAAP financial measures. We encourage participants to review these important disclosures in addition to the description of risk factors contained within our SEC filings. Now let's get underway with the call. This is Patrick Hughes, and joining me today here at New Fortress Energy are Wes Edens, our chairman and chief executive officer, Chris Junta, our chief financial officer, and Andrew Deedy and other members of our senior leadership team. Wes, over to you.

Great. Thanks, Patrick, and welcome, everyone. have a lot of good updates to go through today, so let's start with the deck as usual. So you'd start on page number three, just looking at the financials starting from left to right. Very good quarter and very good start to the year. Segment revenue for the quarter, $601 million. Adjusted EBITDA, $440 million. Free cash flow, $185 million. Push to the right a little bit on the page, and you can see that our Guidance for the year, we are confirming at segment revenues of $3.5 billion, adjusted EBITDA $2 billion, net income $1.2 billion, that's GAAP income, and estimated free cash flow of $1.4 billion. So significant increases from last year, which themselves were significant increases from the year before. On the right-hand side in the box, I basically provide a couple of metrics that we look at. So segment revenues, The $3.5 billion in 2023 versus $2.6 billion in 2022, they're translating to revenues of approximately $16.50 per share. Adjusted EBITDA goal and objectives of $2.0 billion would be roughly $10 per share, free cash flow of $6.50. And I'll talk about this a little bit in just a second, but free cash flow margin, which is – Something that I pay a lot of attention to is estimated to be 37% for the year. So simply translating our revenues into free cash flow at 37% QIP is an extraordinary ratio and one that reflects the health and wellness of the business. So with that, let's look at page number four. What I've tried to do here is just simply lay out the way that I look at the earnings and the way that we actually try and calculate ourselves our progress and our scorecard. We are making every attempt possible to make the financial statements conform to this simple way of laying things out. Gap financials are the way of ultimately leveling the playing field, so the gap numbers, of course, are there. But we are putting a lot of effort this quarter, and I think you'll see next quarter as well, in an attempt to make this be as clean and as simple, actually, as the business really is. And just to start from the top to the bottom, The math of the business is the terminals business, the gas and power that we sell, our terminal operating margin, plus cargo sales because we do sell cargos that are free volumes for us to sell. We make money on our ships. We have a ship's portfolio that's financed, and there's some complexity in accounting on that, but the simple numbers are we reflect in the financials, minus the core SG&E. That gives you just an EBITDA. Then, of course, subtracting interest and taxes and depreciation brings you down to GAAP net income. Adding back depreciation and amortization gets you free cash flow. So I'm oversimplifying for the purposes of example. There's lots of nuances that, of course, are very important in GAAP rules and how we actually account, but this is the way that you should be able to follow the business. On the right-hand side, some rules of thumb that actually jump out of the financials are With an adjusted EBITDA goal, the conversion of that from revenue is approximately 50% to 60%. So a very high conversion of revenues into adjusted EBITDA. And then the result of that is, of course, a significant amount of that turns into free cash flow. So that's the way we view the business, and that's the way we'll try to go through the financials. So with that, let's flip to page number six. So the earnings growth is supported by the continued expansion of the terminals business. The organic growth has been material. It's what we expected. Basically, the business construct is to go and establish terminals and operations in countries that we think have got significant needs for energy and power and clean energy, which is our business. And then once you have established a beachhead, basically over time to grow those operations and continue to expand both operations, volumes, and eventually cash flows. You're seeing now in this first quarter and then throughout the course of this year and you know, the impact of what these are. We'll go through an example here in Puerto Rico in just a second that Brandon will walk through, but the numbers are significant. In the last couple of years, dislocations in the energy prices caused in large part with the Russian invasion has paralyzed customers in many respects. TTF went from, you know, modest prices to very, very high prices, and prices really that were not relatable and usable by people in making new energy commitments And so if you look at our volumes over the period of time, they remain relatively stagnant. The energy prices have reset to what we think of as a new normal, which is very healthy for everyone. Higher than they were before, lower than they are for alternatives. And as a result, you've seen significant increases in customer activity inquiry and significant increases in customer activity in terms of what we've put through the terminals. We've had some very productive hedging and cargo sales over the last couple of years. That's helped our earnings to an extent, but we'll break out for you the impact of our terminals business versus some of our cargo stuff. There's nothing wrong with making money the old-fashioned way, which is buying low and selling high, but the durability and the duration and the quality of earnings that come from the terminals business is what we pay the most attention to. So if you look at the following page, I'll just walk through these numbers and I'm going to turn it over to Brandon in just a second, but This basically looks back at the historical numbers of 2021-22 and the guidance for 2023 and our estimates for 2024. If you just follow along the top line, you can see what our annual estimates are for the terminals P&L, and it's actually moved, obviously, very, very substantially. $236 million in terminals in 2021, $221 million in 2022. As I said, higher energy prices really did paralyze people at that point in time. That has changed dramatically. So our current guidance for the year is $1.3 billion. So over a billion dollar increase from last year. Cargo sales relatively flat over that period. Ships also relatively flat, down a little bit, but a modest decrease. Core SG&A roughly the same. Adjusted EBITDA then going from $605 million in 2021. A billion 071 is the number in 2022. Our guidance is $2 billion for 2023. So obviously a massive increase from last year, which itself was a big increase from the year before. Net income, if you skip down, $97 million in 2021, $194 million in 2022, $1.2 billion in 2023. Not only are there significant amounts more of economic activity, but there's lots of noise from past transactions, the non-control transactions, the know the helis and the brazil stuff etc there's a bunch of different things that have basically been washed out of it uh this quarter there still is a bit of noise but from this point forward we expect you to see very normalized numbers and then free cash flow which of course is the ultimate uh measure of the health of a business so 195 million dollars in 2021 337 million dollars 2022 1.4 billion dollars uh as our estimate for 2023 2024 these are not official guidance numbers but i wanted to reflect What we see in the business today, the simple impact is that where we see the business going structurally in the terminals business, we expect that to continue over the course of this year and next year, especially with the incremental FOMG volumes that Chris will talk about. coming online here later this year and next year. We think we have significant amounts of opportunity for us to grow our business on a core basis. So again, not only the total quantity of earnings and cash flows to increase, but the quality and the durability of those cash flows to go up as well. Nowhere have we had a bigger impact on our business over the last 12 months than in Puerto Rico, there's been some significant development there, all of the constructive. And with that, let me just walk through the example and give a turn over to Brandon. Brandon?