New Fortress Energy Inc.

Good morning, everyone, and welcome to the NFE third quarter 2023 earnings conference call. Today's conference is being recorded and all phone participants are in a listen-only mode, but later you will have the opportunity to ask questions. To get us started today with opening remarks and introductions, I am pleased to turn the floor over to Managing Director of Strategy and Investor Relations, Mr. Chance Pipitone. Please go ahead, sir.

Perfect. Thank you, Melinda, and good morning, everyone. Thank you for joining today's conference call, where we will discuss our third quarter 2023 results, recent developments, operational highlights, and future here at NFE. As Melinda 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. In the same location, you will find a press release regarding our third quarter 2023 results, and the corresponding presentation that we will walk through on today's call. As we proceed through the discussion, we will be referring to that presentation. And in that same presentation, you will 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 dive into the call. My name is, again, Chance Pipitone, and joining me today at New Fortress Energy are Wes Edens, our Chairman and Chief Executive Officer, Chris Junta, our CFO, Andrew Deedy, our Managing Director of New Business, and other managers of our Senior Leadership Team. Wes, over to you.

Great. Thanks, Chance. Welcome, everybody. As Chance may have mentioned, we have a... a presentation that we put together for our term loan bid that's on our website. There's a ton of great information there, and I'm not going to go back and belabor that, but there's a lot of great reference materials there. So the earnings deck is a skinny one this quarter because of all the material that is out there. So let's just dive in. Actually, by far the best operational quarter that we've had in the history of the company. Many, many highlights to talk about in terms of what we've done on the operating side, but a few things to point out. Number one, first and foremost, in our view and many others out there, our first FLNG unit is now firmly in place. It's been mechanically completed. It's in the field. It's connected to the pipeline. It's in the final stages of being commissioned. Really a remarkable accomplishment by the entire team, 5.4% million man hours, two and a half years, so a record of a liquefier in the world by every single measure and something we're quite proud of and obviously a real cornerstone of the supply side of our business. Number two, you know, in Puerto Rico, we completed our two power plants down there, the second of which was done and completed COD at the end of September. Brandon will talk to that, but obviously, again, built in record time, actually at a great impact on the energy system in Puerto Rico, something we're actually very proud of, and also a real cornerstone investment for us in the island and something to really build on in terms of our future activities there. Lastly, I'll have Andrew and Didi talk about Brazil. We were down in Brazil together last week, you know, two massive accomplishments. The two terminals we have down there are now mechanically complete. They both have FSRUs that are headed to be in place in the next 30 to 45 days or so. Brazil is a massive, massive opportunity for us, huge market. There will be a lot of commercial activity that will follow out of this. But getting all of this completed really is the culmination of many years of hard work for us across the FLNG, the Puerto Rican, and the Brazilian markets. In many respects, we now have perhaps the two best markets in the world for our business that are fully operational and generating cash flow. Second highlight of the quarter is we fully financed our balance sheet to determine on B that closed a few weeks ago. This allows us now to focus on the business at hand of operating our business. We expect now to have a very direct line to deleveraging the balance sheet and with operating cash flows and asset sales as we march towards investment grade rating, which is our plan over the next 12 to 24 months. Lastly, and of course the purpose for this call is the earnings call, we had record core operating earnings. Chris will detail them in particular, but basically the transformation of our business where we are now generating cash flows virtually entirely from our customers is significant for us. Q1, we had $15 million of core operating earnings. Q2, we had $49 million in operating earnings. Q3, $195 million in operating earnings. I would expect Q4 to be double or more of that of Q3 and Q1 to be better than Q4. So we really marched a significant distance towards producing better high-quality cash flows, 100% downstream, and really a great way for us to go into the second half of the year. Look at page four briefly. So the quarterly financial results. The three pillars of our earnings are quality, duration, and growth. As I said before, 100% of our earnings are coming from downstream customers, $208 million of adjusted EBITDA for the quarter. We are now in the last stage of the year. Our expectation is still the same, $1.6 billion in adjusted EBITDA for this year, $2.4 billion for next year. $1.6 billion, about $200 million that we expect to come from gains on asset sales in the fourth quarter. So there could be some volatility there in terms of just the timing of those, but those are pretty straightforward. Notably, of the $2.4 billion that we are forecasting for next year, virtually all of it is already contracted. Of our $2.4 billion estimate for next year, all of it, about $250 million, is already contracted. So quality of cash flow is coming 100% from downstream customers. Duration of our portfolio in excess of 12 years. And the growth, we currently only use about 25% of the capacity of our terminals, so there's a massive potential for organic growth going forward. Page number five, in spite of the operational performance, we are significantly undervalued as a company. By every metric that we look at, we are the lowest value across the business. This is something we think will be addressed just simply through producing results and operating the company. But from an earnings per share basis, our estimate for this year is $2.50 to $3 for the year. For next year, $6.50 to $7. So if you apply that to an earnings per share multiple, there is no cheaper company than us in the infrastructure place on earth. If you look at the enterprise value, the EBITDA, which is a good measure of the leverage of the business, not only are we the lowest value in terms of the earnings multiple, we are by far the least leveraged across these different sectors. And lastly, in terms of the growth of the company, our competitive growth rate, earnings per share, 2022 through 2024, 55% annual growth rate, so extraordinary growth rate. Not only has it been an extraordinary growth rate, but we think that the prospects for future growth are absolutely there with the capacity that we have in our terminals and the relatively low utilization. So with that, let's flip quickly to the construction update. I talked about this a little bit at the beginning. What I'll do is I'll turn this over to various members of the team to talk about it, but we have a handful of very, very significant updates. The punchline is that the vast majority of our construction is completed at this point, And so, but let's just go through. I'll have Chris start with the FLNG down in Mexico.