New Fortress Energy Inc.

Good morning, everyone, and welcome to the New Fortress Energy fourth quarter and full year 2023 earnings conference call. Today's conference is being recorded, and all phone participants are in a listen-only mode. But later, we'll have the opportunity to ask questions. To get us started today with opening remarks and introductions, I'm pleased to turn the floor over to Managing Director of Strategy and Investor Relations, Mr. Chance Pepitone. Please go ahead, sir.

Thank you, Lisa, and good morning, everyone. Thank you for joining today's conference call where we will discuss our record fourth quarter and full year 2023 results, recent developments, operational highlights, and future here at NFE. As Lisa 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 that same location, you will find a press release regarding our fourth quarter and full year results and the corresponding presentation that we'll 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, Shans Pipitone, and joining me today at New Fortress Energy are Wes Edens, Chairman and CEO, Chris Giunta, CFO, Andrew Deedy, Managing Director, and Brandon Meckel-Murray, Managing Director. Thank you.

Wes, over to you. Great. Thanks, Chance, and welcome, everybody. As Chance said, as usual, please refer to the deck that we posted here just a few minutes ago. And let's start at the beginning, so page three. 2023 was a very good year, fourth quarter, a record quarter four as well from an operating perspective. $1.3 billion in EBITDA, $380 million in EBITDA for the quarter, more than doubled earnings per share and FFO for 2022 to 2023. And we're poised to roughly double that again this year. So tremendous financial results. Most importantly, when you look at the second line down, it's not number, but it's the second line, the profit from cargo sales, you'll see zero contribution essentially from cargo sales in Q3 and Q4, which now fully reflects that, uh, Our business is operating through the terminals to our customers and our sales of gas and products and power. And so very much of an operating company now as opposed to a development company. And both the quantity and the quality of those earnings were terrific. So it's actually a very, very good thing. If you look at the bottom, when I say funds from operation, this is a metric that we have borrowed from the real estate business, which we think is actually applicable here. Simply put, it takes earnings per share and adds back the non-cash items like depreciation and amortization. What that means is that on our balance sheet right now, we have many billions of dollars of infrastructure, and that's growing. So there's a significant amount of assets on balance sheet. And so simply adding back those non-cash items gives a more accurate reflection of the earnings power of the company. So when you look at it now, $1.61 in FFO in 2022 is $3.56 in 2023, six plus dollars is our guidance for 2024. We'll talk about Brazil because it's actually a major, major issue for us. We have significant amounts of funds for operations from things that are actually on the books right now that Andrew will talk about in a few minutes that we think takes us to $8 or plus in a couple of years in run rate basis. So very, very significant earnings. Obviously, the combination of core earnings at six plus dollars a share along with the 50% growth rate over the last year and projected for this year, plus a 10 plus year duration of our portfolio gives us a significant competitive advantage. We feel very undervalued at these levels, but now this is something that with these results, we think we can go and attack that aggressively. Let's look at page number four. So operational highlights, of which there are many, which we've just condensed into a short page on the absolute highlights. Let's start in Brazil. We came back from Brazil. late last night. In the news yesterday, you'll see that both the Bacarena and the Santa Catarina terminals are complete and are now hooked up. You know, the market in Brazil is massive. It's a sizable market. You know, it's self on what we have right now. And the prospects for additional growth are actually quite significant. I won't steal Andrew's thunder, but basically 500 million plus in EBITDA from the existing business is obviously a massive result But that is really the tip of the iceberg when you look at the future potential power auctions which are coming. You know, the combination of our terminals and gas and power give us a massive competitive advantage. And this is something that I hope that will be appreciated for here in the very, very short term. Puerto Rico, which has been, you know, a huge part of our success in the last several years, you know, we really highlight the two installations for the FEMA power plants that we built in the middle of last year. These power plants have become essential to the island's energy security, the most reliable power on the island. Brandon runs that business for us. We've added to our already large presence there with these and other initiatives we're working on. We're working with the government closely on many different fronts and are very confident to both grow and continue our business there. Fast Island G, lastly, there's a lot of news around that. So in short terms, we installed the first of our facilities We expect first LNG in the month of March and the first cargo in the month of April. So obviously we're at the very, very tail end of that project. And while it's been a little bit delayed, it's important to note that it still would be the fastest LNG installation in the history of the planet. So we are always aggressive in terms of our objectives, but even with it slipping a little bit on balance, we feel very, very good about what we have done. We just recently announced that FLNG2 is now fully financed. Construction begins in April. We believe that that facility will turn on in the first quarter of 2026. That's a meaningful step as well because it brings us onshore in a terminal that actually has substantial expansion capabilities as well. You know, linking these facilities to our downstream creates a very, very powerful business model. You know, the existing downstream in Puerto Rico and FDA countries make more than covers the amounts of LNG that we will produce from these two facilities. And in recent developments, you know, we obviously disagree with the liquefaction pause that the government has taken. But we're the only company we believe that's not affected by this as a result of our downstream customers and our ability to export to both Puerto Rico as well as, you know, the other FTA countries. So that's a very good news. Page Bob, the financial highlights, you know, both a very tremendous year in both the quantity and quality of earnings. The one thing I would highlight is this run rate number that we have circled on the right-hand side. That reflects, for the most part, what is already in place in Brazil. So obviously going from $1.61 to $3.56 to $6 to $8 plus two years from now when we are fully operational there. The FFO is basically cash flow. We have $6 plus this year. And with the $2 in Brazil and the duration of our portfolio and the competitive advantage we've got in these different markets that we operate in, we feel like the future is extremely bright for us financially. At the same time, you know, growth and net CapEx have peaked and expected to decrease significantly in 2024 and below. You can see the net numbers across the bottom of the page go down by roughly 90% of 2023 to 2024, so a massive decline in CapEx. What that means in simple terms is that the operating earnings that we generate will then go to the bottom line for distributable cash flow for us to to run the business and manage ourselves going forward. Your page six is a key page for us. We look at this page. It basically highlights the three pillars of the company, which are basically power and gas and terminals. We think of this in very simple terms. The terminals provide both the gateway to our markets, but are also the sustainable competitive advantage that is hard for others to create in a timely manner. And so it gives us so much confidence in the growth of our businesses. On the left-hand side, on the power side, you'll see that we are very much of a power company. So 8.689 gigawatts of power. So a very, very large power company that we both own, manage, and provide fuel supply to. The gas in our business right now is largely matched. So we actually – our intention is not to be exposed to changes in market price. And I would say that when you look at our results for the last two quarters of the year, you see a precipitous decline in – the world's LNG prices, and our earnings not only were stable, but they were actually growing. So very, very clear evidence that we are not tied into market prices for LNG. That's not our intention, but the results that speak to it. The bottom line on the terminals is that while they currently have significant amounts of throughput, they also have significant amounts of potential upside utility. So Jamaica, we only use 10% of our utilization. Puerto Rico, 25%. Mexico, 10%, Nicaragua, 20%, Brazil, 40%. So these terminals have got a substantial amount of upside. They require essentially little or no CapEx for us to move more product through them. So we think that the combination of power and gas in terminals is a very, very powerful one and gives us a very, very bright future. The last thing I would say is that there are many companies out there that provide one of these three elements. They either are a power company, sort of IPPs, or they invest in power companies. their gas in terms of either owning the gas in the ground or they own liquefaction. And there are terminals companies or people who operate on a fee basis terminals around the world. Putting them all together is what allows us to actually, number one, and most importantly, serve our customers because it creates this one-stop solution that is so important to them so we can actually be attentive to what their needs are. But number two, it gives you a massive competitive advantage of others that are trying to do the same thing. So it's a very, very powerful combination. With that, I'll turn it over to Brandon to talk about Puerto Rico. Brandon?