Attached files
file | filename |
---|---|
EX-32.2 - EXHIBIT 32.2 - New Fortress Energy Inc. | ex32_2.htm |
EX-32.1 - EXHIBIT 32.1 - New Fortress Energy Inc. | ex32_1.htm |
EX-31.2 - EXHIBIT 31.2 - New Fortress Energy Inc. | ex31_2.htm |
EX-31.1 - EXHIBIT 31.1 - New Fortress Energy Inc. | ex31_1.htm |
EX-10.3 - EXHIBIT 10.3 - New Fortress Energy Inc. | ex10_3.htm |
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
83-1482060
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
111 W. 19th Street, 8th Floor
New York, NY
|
10011
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Class A shares, representing limited liability company interests
|
“NFE”
|
NASDAQ Global Select Market
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
|
Emerging growth company ☒
|
ii
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||
iii
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5 | ||
Item 1.
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5 | |
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Item 2.
|
28 | |
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Item 3.
|
38 | |
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||
Item 4.
|
39 | |
40 | ||
Item 1.
|
40 | |
|
||
Item 1A.
|
40 | |
|
||
Item 2.
|
71 | |
|
||
Item 3.
|
71 | |
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Item 4.
|
71 | |
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Item 5.
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71 | |
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Item 6.
|
72 | |
73 |
Btu
|
the amount of heat required to raise the temperature of one avoirdupois pound of pure water from 59 degrees Fahrenheit to 60 degrees Fahrenheit at an absolute pressure of 14.696 pounds per square inch gage
|
CAA
|
Clean Air Act
|
CERCLA
|
Comprehensive Environmental Response, Compensation and Liability Act
|
CWA
|
Clean Water Act
|
DOE
|
U.S. Department of Energy
|
FERC
|
Federal Energy Regulatory Commission
|
GAAP
|
generally accepted accounting principles in the United States
|
GHG
|
greenhouse gases
|
GSA
|
gas sales agreement
|
Henry Hub
|
a natural gas pipeline located in Erath, Louisiana that serves as the official delivery location for futures contracts on the New York Mercantile Exchange
|
ISO container
|
International Organization of Standardization, an intermodal container
|
LNG
|
natural gas in its liquid state at or below its boiling point at or near atmospheric pressure
|
MMBtu
|
one million Btus, which corresponds to approximately 12.1 LNG gallons
|
MW
|
megawatt. We estimate 2,500 LNG gallons would be required to produce one megawatt
|
NGA
|
Natural Gas Act of 1938, as amended
|
non-FTA countries
|
countries without a free trade agreement with the United States providing for national treatment for trade in natural gas and with which trade is permitted
|
OPA
|
Oil Pollution Act
|
OUR
|
Office of Utilities Regulation (Jamaica)
|
PHMSA
|
Pipeline and Hazardous Materials Safety Administration
|
PPA
|
power purchase agreement
|
SSA
|
steam supply agreement
|
TBtu
|
one trillion Btus, which corresponds to approximately 12,100,000 LNG gallons
|
• |
our limited operating history;
|
• |
loss of one or more of our customers;
|
• |
inability to procure LNG on a fixed-price basis, or otherwise to manage LNG price risks, including hedging arrangements;
|
• |
the completion of construction on our LNG terminals, power plants or Liquefaction Facilities (as defined herein) and the terms of our construction contracts for the completion of these assets;
|
• |
cost overruns and delays in the completion of one or more of our LNG terminals, power plants or Liquefaction Facilities, as well as difficulties in obtaining sufficient financing to pay for such costs and delays;
|
• |
our ability to obtain additional financing to effect our strategy;
|
• |
failure to produce or purchase sufficient amounts of LNG or natural gas at favorable prices to meet customer demand;
|
• |
hurricanes or other natural or manmade disasters;
|
• |
the severity and duration of world health events, including the recent novel coronavirus (“COVID-19”) pandemic and related economic and political impacts on our or our customers’ or suppliers’ operations and
financial status;
|
• |
failure to obtain and maintain approvals and permits from governmental and regulatory agencies;
|
• |
operational, regulatory, environmental, political, legal and economic risks pertaining to the construction and operation of our facilities;
|
• |
inability to contract with suppliers and tankers to facilitate the delivery of LNG on their chartered LNG tankers;
|
• |
volatility or cyclical or other changes in the demand for and price of LNG and natural gas and alternative fuels including oil-based fuels;
|
• |
uncertainty regarding the timing, pace and extent of an economic recovery in the United States, the other jurisdictions in which we operate and elsewhere, which in turn will likely affect demand for crude oil and
natural gas;
|
• |
failure of natural gas to be a competitive source of energy in the markets in which we operate, and seek to operate;
|
• |
competition from third parties in our business;
|
• |
inability to re-finance our outstanding indebtedness or implement our financing plans;
|
• |
changes to environmental and similar laws and governmental regulations that are adverse to our operations;
|
• |
inability to enter into favorable agreements and obtain necessary regulatory approvals;
|
• |
the tax treatment of us or of an investment in our Class A shares;
|
• |
the completion of the Exchange Transactions (as defined below);
|
• |
a major health and safety incident relating to our business;
|
• |
increased labor costs, and the unavailability of skilled workers or our failure to attract and retain qualified personnel; and
|
• |
risks related to the jurisdictions in which we do, or seek to do, business, particularly Florida, Puerto Rico, Mexico, Jamaica, Angola, Nicaragua and other jurisdictions in the Caribbean.
|
March 31,
2020 |
December 31,
2019 |
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
232,698
|
$
|
27,098
|
||||
Restricted cash
|
32,512
|
30,966
|
||||||
Receivables, net of allowances of $0 and $0, respectively
|
45,976
|
49,890
|
||||||
Inventory
|
28,602
|
63,432
|
||||||
Prepaid expenses and other current assets
|
74,826
|
39,734
|
||||||
Total current assets
|
414,614
|
211,120
|
||||||
Restricted cash
|
26,055
|
34,971
|
||||||
Construction in progress
|
333,646
|
466,587
|
||||||
Property, plant and equipment, net
|
479,089
|
192,222
|
||||||
Right-of-use asset, net
|
115,511
|
-
|
||||||
Intangible assets, net
|
42,276
|
43,540
|
||||||
Finance leases, net
|
1,002
|
91,174
|
||||||
Investment in equity securities
|
140
|
2,540
|
||||||
Deferred tax assets, net
|
2,756
|
34
|
||||||
Other non-current assets
|
74,027
|
81,626
|
||||||
Total assets
|
$
|
1,489,116
|
$
|
1,123,814
|
||||
Liabilities
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
21,256
|
$
|
11,593
|
||||
Accrued liabilities
|
68,529
|
54,943
|
||||||
Current lease liabilities
|
29,944
|
-
|
||||||
Due to affiliates
|
7,377
|
10,252
|
||||||
Other current liabilities
|
24,545
|
25,475
|
||||||
Total current liabilities
|
151,651
|
102,263
|
||||||
Long-term debt
|
945,209
|
619,057
|
||||||
Non-current lease liabilities
|
64,760
|
-
|
||||||
Deferred tax liabilities, net
|
-
|
241
|
||||||
Other long-term liabilities
|
13,305
|
14,929
|
||||||
Total liabilities
|
1,174,925
|
736,490
|
||||||
Commitments and contingences (Note 18)
|
||||||||
Stockholders’ equity
|
||||||||
Class A shares, 24,820,003 shares issued and 24,236,495 outstanding as of March 31, 2020; 23,607,096 shares issued and outstanding as of December 31, 2019
|
133,166
|
130,658
|
||||||
Treasury shares, 583,508 shares as of March 31, 2020, at cost; 0 shares at December 31, 2019, at cost
|
(6,132
|
)
|
-
|
|||||
Class B shares, 144,342,572 shares, issued and outstanding as of March 31, 2020 and December 31, 2019
|
-
|
-
|
||||||
Accumulated deficit
|
(55,427
|
)
|
(45,823
|
)
|
||||
Accumulated other comprehensive loss
|
(83
|
)
|
(30
|
)
|
||||
Total stockholders' equity attributable to NFE
|
71,524
|
84,805
|
||||||
Non-controlling interest
|
242,667
|
302,519
|
||||||
Total stockholders' equity
|
314,191
|
387,324
|
||||||
Total liabilities and stockholders' equity
|
$
|
1,489,116
|
$
|
1,123,814
|
Three Months Ended March 31,
|
||||||||
2020
|
2019
|
|||||||
Revenues
|
||||||||
Operating revenue
|
$
|
63,502
|
$
|
26,138
|
||||
Other revenue
|
11,028
|
3,813
|
||||||
Total revenues
|
74,530
|
29,951
|
||||||
Operating expenses
|
||||||||
Cost of sales
|
68,216
|
33,349
|
||||||
Operations and maintenance
|
8,483
|
4,499
|
||||||
Selling, general and administrative
|
28,370
|
49,749
|
||||||
Loss on mitigation sales
|
208
|
-
|
||||||
Depreciation and amortization
|
5,254
|
1,691
|
||||||
Total operating expenses
|
110,531
|
89,288
|
||||||
|
||||||||
Operating loss
|
(36,001
|
)
|
(59,337
|
)
|
||||
Interest expense
|
13,890
|
3,284
|
||||||
Other expense (income), net
|
611
|
(2,575
|
)
|
|||||
Loss on extinguishment of debt, net
|
9,557
|
-
|
||||||
Loss before taxes
|
(60,059
|
)
|
(60,046
|
)
|
||||
Tax (benefit) expense
|
(4
|
)
|
246
|
|||||
Net loss
|
(60,055
|
)
|
(60,292
|
)
|
||||
Net loss attributable to non-controlling interest
|
51,757
|
46,735
|
||||||
Net loss attributable to stockholders
|
$
|
(8,298
|
)
|
$
|
(13,557
|
)
|
||
Net loss per share – basic and diluted
|
$
|
(0.32
|
)
|
$
|
(0.96
|
)
|
||
Weighted average number of shares outstanding – basic and diluted
|
26,029,492
|
14,094,534
|
||||||
Other comprehensive loss:
|
||||||||
Net loss
|
$
|
(60,055
|
)
|
$
|
(60,292
|
)
|
||
Unrealized loss on currency translation adjustment
|
369
|
-
|
||||||
Comprehensive loss
|
(60,424
|
)
|
(60,292
|
)
|
||||
Comprehensive loss attributable to non-controlling interest
|
52,073
|
46,735
|
||||||
Comprehensive loss attributable to stockholders
|
$
|
(8,351
|
)
|
$
|
(13,557
|
)
|
Members' Capital
|
Class A shares
|
Class B shares
|
Treasury shares
|
Accumulated
|
Accumulated other
comprehensive
|
Non-
controlling
|
Total
stockholders'
|
|||||||||||||||||||||||||||||||||||||||||
Units
|
Amounts
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
deficit
|
(loss) income
|
Interest
|
equity
|
|||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019
|
-
|
$
|
-
|
23,607,096
|
$
|
130,658
|
144,342,572
|
$
|
-
|
-
|
$
|
-
|
$
|
(45,823
|
)
|
$
|
(30
|
)
|
$
|
302,519
|
$
|
387,324
|
||||||||||||||||||||||||||
Cumulative effect of accounting change (ASC 842)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,306
|
)
|
-
|
(7,779
|
)
|
(9,085
|
)
|
|||||||||||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(8,298
|
)
|
-
|
(51,757
|
)
|
(60,055
|
)
|
|||||||||||||||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(53
|
)
|
(316
|
)
|
(369
|
)
|
|||||||||||||||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
-
|
2,508
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,508
|
||||||||||||||||||||||||||||||||||||
Issuance of shares for vested RSUs
|
-
|
-
|
1,212,907
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||
Shares withheld from employees related to share-based compensation, at cost
|
-
|
-
|
-
|
-
|
-
|
-
|
(583,508
|
)
|
(6,132
|
)
|
-
|
-
|
-
|
(6,132
|
)
|
|||||||||||||||||||||||||||||||||
Balance as of March 31, 2020
|
-
|
$
|
-
|
24,820,003
|
$
|
133,166
|
144,342,572
|
$
|
-
|
(583,508
|
)
|
$
|
(6,132
|
)
|
$
|
(55,427
|
)
|
$
|
(83
|
)
|
$
|
242,667
|
$
|
314,191
|
Members' Capital
|
Class A shares
|
Class B shares
|
Treasury shares
|
Accumulated
|
Accumulated other
comprehensive
|
Non-
controlling
|
Total
stockholders'
|
|||||||||||||||||||||||||||||||||||||||||
Units
|
Amounts
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
deficit
|
(loss) income
|
Interest
|
equity
|
|||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018
|
67,983,095
|
$
|
426,741
|
-
|
$
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
(158,423
|
)
|
$
|
(11
|
)
|
$
|
14,340
|
$
|
282,647
|
||||||||||||||||||||||||||
Activity prior to the IPO and related organizational transactions:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,923
|
)
|
11
|
(91
|
)
|
(8,003
|
)
|
|||||||||||||||||||||||||||||||||
Effects of the IPO and related organizational transactions:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A shares in the IPO, net of underwriting discount and offering costs
|
-
|
-
|
20,837,272
|
32,136
|
-
|
-
|
-
|
-
|
-
|
-
|
235,874
|
268,010
|
||||||||||||||||||||||||||||||||||||
Effects of the reorganization transactions
|
(67,983,095
|
)
|
(426,741
|
)
|
-
|
51,092
|
147,058,824
|
-
|
-
|
-
|
146,420
|
-
|
229,229
|
-
|
||||||||||||||||||||||||||||||||||
Activity subsequent to the IPO and related organizational transactions:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,645
|
)
|
-
|
(46,644
|
)
|
(52,289
|
)
|
|||||||||||||||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
-
|
19,037
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
19,037
|
||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019
|
-
|
$
|
-
|
20,837,272
|
$
|
102,265
|
147,058,824
|
$
|
-
|
-
|
$
|
-
|
$
|
(25,571
|
)
|
$
|
-
|
$
|
432,708
|
$
|
509,402
|
Three Months Ended March 31,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(60,055
|
)
|
$
|
(60,292
|
)
|
||
Adjustments for:
|
||||||||
Amortization of deferred financing costs
|
3,353
|
981
|
||||||
Depreciation and amortization
|
5,481
|
1,849
|
||||||
Loss on extinguishment of debt, net
|
9,557
|
-
|
||||||
Deferred taxes
|
(18
|
)
|
201
|
|||||
Change in value of Investment in equity securities
|
2,400
|
(896
|
)
|
|||||
Share-based compensation
|
2,508
|
19,037
|
||||||
Other
|
88
|
204
|
||||||
Decrease (Increase) in receivables
|
5,752
|
(3,102
|
)
|
|||||
Decrease (Increase) in inventories
|
34,830
|
(11,043
|
)
|
|||||
(Increase) Decrease in other assets
|
(54,080
|
)
|
15,684
|
|||||
Decrease in right-of-use asset, net
|
9,263
|
-
|
||||||
Increase in accounts payable/accrued liabilities
|
2,132
|
3,567
|
||||||
(Decrease) Increase in amounts due to affiliates
|
(2,875
|
)
|
3,117
|
|||||
(Decrease) in lease liabilities
|
(9,170
|
)
|
-
|
|||||
(Decrease) in other liabilities
|
(477
|
)
|
(355
|
)
|
||||
Net cash used in operating activities
|
(51,311
|
)
|
(31,048
|
)
|
||||
Cash flows from investing activities
|
||||||||
Capital expenditures
|
(56,098
|
)
|
(136,281
|
)
|
||||
Principal payments received on finance lease, net
|
50
|
284
|
||||||
Net cash used in investing activities
|
(56,048
|
)
|
(135,997
|
)
|
||||
Cash flows from financing activities
|
||||||||
Proceeds from borrowings of debt
|
832,144
|
220,000
|
||||||
Payment of deferred financing costs
|
(14,069
|
)
|
(4,400
|
)
|
||||
Repayment of debt
|
(506,402
|
)
|
(1,250
|
)
|
||||
Proceeds from IPO
|
-
|
274,948
|
||||||
Payments related to tax withholdings for share-based compensation
|
(6,084
|
)
|
-
|
|||||
Payment of offering costs
|
-
|
(6,105
|
)
|
|||||
Net cash provided by financing activities
|
305,589
|
483,193
|
||||||
Net increase in cash, cash equivalents and restricted cash
|
198,230
|
316,148
|
||||||
Cash, cash equivalents and restricted cash – beginning of period
|
93,035
|
100,853
|
||||||
Cash, cash equivalents and restricted cash – end of period
|
$
|
291,265
|
$
|
417,001
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Changes in Accounts payable and accrued liabilities associated with construction in progress and property, plant and equipment additions
|
$
|
13,359
|
$
|
(32,946
|
)
|
1.
|
Organization
|
2.
|
Significant accounting policies
|
(a)
|
Basis of presentation and principles of consolidation
|
(b)
|
Use of estimates
|
(c)
|
Legal and contingencies
|
(d)
|
Revenue recognition
|
3.
|
Adoption of new and revised standards
|
a)
|
New standards, amendments and interpretations issued but not effective for the financial year beginning January 1, 2020:
|
b)
|
New and amended standards adopted by the Company:
|
4.
|
Revenue from contracts with customers
|
March 31,
2020
|
December 31,
2019
|
|||||||
Contract assets - current
|
$
|
4,570
|
$
|
3,787
|
||||
Contract assets - non-current
|
21,582
|
19,474
|
||||||
Total contract assets
|
$
|
26,152
|
$
|
23,261
|
||||
Contract liability
|
$
|
3,546
|
$
|
6,542
|
||||
Revenue recognized in the period from:
|
||||||||
Amounts included in contract liability at the beginning of the period
|
$
|
3,136
|
$
|
-
|
Three Months Ended March 31,
|
||||||||
2020
|
2019
|
|||||||
Development services revenue
|
$
|
10,071
|
$
|
-
|
||||
Lease and other revenue
|
957
|
3,813
|
||||||
Total other revenue
|
$
|
11,028
|
$
|
3,813
|
Period
|
Revenue
|
|||
Remainder of 2020
|
$
|
180,354
|
||
2021
|
228,237
|
|||
2022
|
226,728
|
|||
2023
|
226,000
|
|||
2024
|
225,283
|
|||
Thereafter
|
3,065,162
|
|||
Total
|
$
|
4,151,764
|
5.
|
Leases
|
Three Months
Ended
March 31, 2020
|
||||
Fixed lease cost
|
$
|
10,267
|
||
Variable lease cost
|
639
|
|||
Short-term lease cost
|
286
|
|||
|
||||
Lease cost - Cost of Sales
|
$
|
9,351
|
||
Lease cost - Operations and maintenance
|
388
|
|||
Lease cost - Selling, general and administrative
|
1,453
|
Three Months
Ended
March 31, 2020
|
||||
Operating cash outflows for operating lease liabilities
|
$
|
10,096
|
||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
127,994
|
Operating Leases
|
||||
Due remainder of 2020
|
$
|
27,296
|
||
2021
|
35,382
|
|||
2022
|
18,291
|
|||
2023
|
6,986
|
|||
2024
|
7,098
|
|||
Thereafter
|
33,454
|
|||
Total lease payments
|
128,507
|
|||
Less: effects of discounting
|
33,803
|
|||
Present value of lease liabilities
|
$
|
94,704
|
||
Current lease liabilities
|
$
|
29,944
|
||
Non-current lease liabilities
|
64,760
|
|
Operating Leases | |||
2020
|
$
|
37,776
|
||
2021
|
35,478
|
|||
2022
|
18,387
|
|||
2023
|
7,083
|
|||
2024
|
7,151
|
|||
Thereafter
|
26,458
|
|||
Total
|
$
|
132,333
|
March 31,
2020
|
||||
Property, plant and equipment
|
$
|
8,872
|
||
Accumulated depreciation
|
(501
|
)
|
||
Property, plant and equipment, net
|
$
|
8,371
|
Future cash receipts
|
||||||||
Financing leases
|
Operating leases
|
|||||||
Remainder of 2020
|
$
|
226
|
$
|
234
|
||||
2021
|
303
|
262
|
||||||
2022
|
298
|
222
|
||||||
2023
|
304
|
225
|
||||||
2024
|
304
|
227
|
||||||
Thereafter
|
837
|
916
|
||||||
Total
|
$
|
2,272
|
$
|
2,086
|
||||
Less: Imputed interest
|
1,064
|
|||||||
Present value of total lease receipts
|
$
|
1,208
|
||||||
Current finance leases, net
|
$
|
206
|
||||||
Non-current finance leases, net
|
1,002
|
6.
|
Fair value
|
• |
Level 1 – observable inputs such as quoted prices in active markets for identical assets or liabilities.
|
• |
Level 2 - inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs.
|
• |
Level 3 - unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants price the asset or liability.
|
• |
Market approach – uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
|
• |
Income approach – uses valuation techniques, such as discounted cash flow technique, to convert future amounts to a single present amount based on current market expectations about those future amounts.
|
• |
Cost approach – based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).
|
March 31, 2020
|
|||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
Valuation
technique |
|||||||||||||
Assets
|
|||||||||||||||||
Cash and cash equivalents
|
$
|
232,698
|
$
|
-
|
$
|
-
|
$
|
232,698
|
Market approach
|
||||||||
Restricted cash
|
58,567
|
-
|
-
|
58,567
|
Market approach
|
||||||||||||
Investment in equity securities
|
140
|
-
|
-
|
140
|
Market approach
|
||||||||||||
Total
|
$
|
291,405
|
$
|
-
|
$
|
-
|
$
|
291,405
|
|||||||||
Liabilities
|
|||||||||||||||||
Derivative liability¹
|
$
|
-
|
$
|
-
|
$
|
8,583
|
$
|
8,583
|
Income approach
|
||||||||
Equity agreement²
|
-
|
-
|
15,863
|
15,863
|
Income approach
|
||||||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
24,446
|
$
|
24,446
|
December 31, 2019
|
|||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
Valuation
technique
|
|||||||||||||
Assets
|
|||||||||||||||||
Cash and cash equivalents
|
$
|
27,098
|
$
|
-
|
$
|
-
|
$
|
27,098
|
Market approach
|
||||||||
Restricted cash
|
65,937
|
-
|
-
|
65,937
|
Market approach
|
||||||||||||
Investment in equity securities
|
2,540
|
-
|
-
|
2,540
|
Market approach
|
||||||||||||
Total
|
$
|
95,575
|
$
|
-
|
$
|
-
|
$
|
95,575
|
|||||||||
Liabilities
|
|||||||||||||||||
Derivative liability¹
|
$
|
-
|
$
|
-
|
$
|
9,800
|
$
|
9,800
|
Income approach
|
||||||||
Equity agreement²
|
-
|
-
|
16,800
|
16,800
|
Income approach
|
||||||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
26,600
|
$
|
26,600
|
(1)
|
Consideration due to the sellers of Shannon LNG once first gas is supplied from the terminal to be built.
|
(2)
|
To be paid in shares at the earlier of agreed-upon date or the commencement of significant construction activities specified in the Shannon LNG Agreement.
|
7.
|
Restricted cash
|
March 31,
2020
|
December 31,
2019
|
|||||||
Collateral for performance under customer agreements
|
$
|
15,000
|
$
|
15,000
|
||||
Collateral for LNG purchases
|
29,168
|
35,000
|
||||||
Collateral for letters of credit and performance bonds
|
6,018
|
7,388
|
||||||
Debt service reserve account
|
8,131
|
8,299
|
||||||
Other restricted cash
|
250
|
250
|
||||||
Total restricted cash
|
$
|
58,567
|
$
|
65,937
|
||||
Current restricted cash
|
$
|
32,512
|
$
|
30,966
|
||||
Non-current restricted cash
|
26,055
|
34,971
|
8.
|
Inventory
|
March 31,
2020
|
December 31,
2019
|
|||||||
LNG and natural gas inventory
|
$
|
15,949
|
$
|
57,436
|
||||
Automotive diesel oil inventory
|
9,498
|
4,746
|
||||||
Materials, supplies and other
|
3,155
|
1,250
|
||||||
Total inventory
|
$
|
28,602
|
$
|
63,432
|
9.
|
Prepaid expenses and other current assets
|
March 31,
2020
|
December 31,
2019
|
|||||||
Prepaid LNG
|
$
|
46,989
|
$
|
7,097
|
||||
Prepaid expenses
|
5,251
|
7,458
|
||||||
Due from affiliates (Note 21)
|
1,468
|
1,577
|
||||||
Other current assets
|
21,118
|
23,602
|
||||||
Total prepaid expenses and other current assets
|
$
|
74,826
|
$
|
39,734
|
10.
|
Investment in equity securities
|
11.
|
Construction in progress
|
March 31,
|
||||
2020
|
||||
Balance at beginning of period
|
$
|
466,587
|
||
Additions
|
64,300
|
|||
Transferred to property, plant and equipment, net (Note 12)
|
(197,241
|
)
|
||
Balance at end of period
|
$
|
333,646
|
12.
|
Property, plant and equipment, net
|
March 31,
2020 |
December 31,
2019 |
|||||||
CHP facilities
|
$
|
117,296
|
$
|
-
|
||||
Terminal and power plant equipment
|
105,643
|
14,981
|
||||||
LNG liquefaction facilities
|
65,992
|
66,273
|
||||||
Gas terminals
|
71,673
|
52,781
|
||||||
Gas pipelines
|
58,898
|
11,692
|
||||||
ISO containers and other equipment
|
71,610
|
39,951
|
||||||
Land
|
15,618
|
15,401
|
||||||
Leasehold improvements
|
8,295
|
8,054
|
||||||
Accumulated depreciation
|
(35,936
|
)
|
(16,911
|
)
|
||||
Total property, plant and equipment, net
|
$
|
479,089
|
$
|
192,222
|
13.
|
Intangible assets
|
March 31, 2020
|
||||||||||||||||
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
Weighted
Average Life
|
|||||||||||||
Definite-lived intangible assets
|
||||||||||||||||
Shannon LNG permits
|
$
|
41,140
|
1,414
|
$
|
39,726
|
40
|
||||||||||
Easements
|
1,559
|
152
|
1,407
|
30
|
||||||||||||
Indefinite-lived intangible assets
|
||||||||||||||||
Easements
|
1,143
|
-
|
1,143
|
n/a
|
||||||||||||
Total intangible assets
|
$
|
43,842
|
$
|
1,566
|
$
|
42,276
|
December 31, 2019
|
||||||||||||||||
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
Weighted
Average Life
|
|||||||||||||
Definite-lived intangible assets
|
||||||||||||||||
Shannon LNG leases and permits
|
$
|
42,157
|
$
|
1,198
|
$
|
40,959
|
40
|
|||||||||
Easements
|
1,559
|
139
|
1,420
|
30
|
||||||||||||
Indefinite-lived intangible assets
|
||||||||||||||||
Easements
|
1,161
|
-
|
1,161
|
n/a
|
||||||||||||
Total intangible assets
|
$
|
44,877
|
$
|
1,337
|
$
|
43,540
|
14.
|
Other non-current assets
|
March 31,
2020
|
December 31,
2019
|
|||||||
Nonrefundable deposit
|
$
|
24,439
|
$
|
22,262
|
||||
Contract asset (Note 4)
|
21,582
|
19,474
|
||||||
Cost to fulfill (Note 4)
|
8,630
|
8,508
|
||||||
Unbilled receivables (Note 4)
|
6,732
|
-
|
||||||
Upfront payments to customers
|
5,819
|
5,904
|
||||||
Port access rights and initial lease costs
|
-
|
17,762
|
||||||
Other
|
6,825
|
7,716
|
||||||
Total other non-current assets
|
$
|
74,027
|
$
|
81,626
|
15.
|
Accrued liabilities
|
March 31,
2020
|
December 31,
2019
|
|||||||
Accrued construction costs
|
$
|
21,777
|
$
|
25,037
|
||||
Accrued interest
|
13,828
|
-
|
||||||
Accrued bonuses
|
3,462
|
14,991
|
||||||
Other accrued expenses
|
29,462
|
14,915
|
||||||
Total accrued liabilities
|
$
|
68,529
|
$
|
54,943
|
16.
|
Debt
|
March 31,
2020 |
December 31,
2019 |
|||||||
Credit Agreement, due January 15, 2023
|
$
|
768,940
|
$
|
-
|
||||
Term Loan Facility, due January 21, 2020
|
-
|
495,000
|
||||||
Senior Secured Bonds, due September 2034
|
71,005
|
70,960
|
||||||
Senior Secured Bonds, due December 2034
|
62,966
|
10,823
|
||||||
Senior Unsecured Bonds, due September 2036
|
42,298
|
42,274
|
||||||
Total debt
|
$
|
945,209
|
$
|
619,057
|
||||
Current portion of debt
|
$
|
-
|
$
|
-
|
||||
Non-current portion of debt
|
945,209
|
619,057
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
Interest costs:
|
||||||||
Interest per contractual rates
|
$
|
18,874
|
$
|
4,889
|
||||
Amortization of debt issuance costs
|
4,622
|
2,064
|
||||||
Total interest costs
|
23,496
|
6,953
|
||||||
Capitalized interest
|
9,606
|
3,669
|
||||||
Total interest expense
|
$
|
13,890
|
$
|
3,284
|
17.
|
Income taxes
|
18.
|
Commitments and contingencies
|
19.
|
Earnings per share
|
Three Months
Ended
March 31, 2020 |
Three Months
Ended
March 31, 2019 |
|||||||
Numerator:
|
||||||||
Net loss
|
$
|
(60,055
|
)
|
$
|
(60,292
|
)
|
||
Less: net loss attributable to non-controlling interests
|
51,757
|
46,735
|
||||||
Net loss attributable to Class A shares
|
$
|
(8,298
|
)
|
$
|
(13,557
|
)
|
||
Denominator:
|
||||||||
Weighted-average shares-basic and diluted
|
26,029,492
|
14,094,534
|
||||||
Net loss per share - basic and diluted
|
$
|
(0.32
|
)
|
$
|
(0.96
|
)
|
March 31, 2020
|
March 31, 2019
|
|||||||
Unvested RSUs¹
|
1,890,125
|
4,184,183
|
||||||
Class B shares²
|
144,342,572
|
147,058,824
|
||||||
Shannon Equity Agreement shares3
|
1,635,462
|
1,416,554
|
||||||
Total
|
147,868,159
|
152,659,561
|
1
|
Represents the number of instruments outstanding at the end of the period.
|
2
|
Class B shares at the end of the period are considered potentially dilutive Class A shares.
|
3 |
Class A shares that would be issued in relation to the Shannon LNG Equity Agreement.
|
20.
|
Share-based compensation
|
Restricted Share
Units |
Weighted-average
grant date fair |
|||||||
Non-vested RSUs as of December 31, 2019
|
3,137,415
|
$
|
13.44
|
|||||
Granted
|
109,409
|
14.47
|
||||||
Vested
|
(1,341,094
|
)
|
13.51
|
|||||
Forfeited
|
(15,605
|
)
|
13.51
|
|||||
Non-vested RSUs as of March 31, 2020
|
1,890,125
|
$
|
13.45
|
21.
|
Related party transactions
|
March 31,
2020
|
December 31,
2019
|
|||||||
Amounts due to affiliates
|
$
|
7,377
|
$
|
10,252
|
||||
Amounts due from affiliates
|
1,468
|
1,577
|
22.
|
Subsequent events
|
We are closely monitoring the impact of the novel coronavirus (“COVID-19”) pandemic on all aspects of our operations and development projects. While we did not incur significant disruptions during the three months ended March 31, 2020 from the COVID-19 pandemic, there are important uncertainties including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. Therefore, the effects of COVID-19 at this time are hard to predict. We do not currently expect these factors to have a significant impact on our results of operations, liquidity or financial position, or our development budgets or timelines. We primarily operate under long-term contracts with customers, many of which contain fixed minimum volumes that must be purchased on a “take-or-pay” basis, which has limited the impact of the COVID-19 pandemic on our current operations. Based on the essential nature of the services we provide to support power generation facilities, our development projects have not currently been significantly impacted by responses to the COVID-19 pandemic. However, we are actively monitoring the spread of the pandemic and the actions that governments and regulatory agencies are taking to fight the spread.
Three Months Ended March 31,
|
||||||||||||
2020
|
2019
|
Change
|
||||||||||
Revenues
|
||||||||||||
Operating revenue
|
$
|
63,502
|
$
|
26,138
|
$
|
37,364
|
||||||
Other revenue
|
11,028
|
3,813
|
7,215
|
|||||||||
Total revenues
|
74,530
|
29,951
|
44,579
|
|||||||||
Operating expenses
|
||||||||||||
Cost of sales
|
68,216
|
33,349
|
34,867
|
|||||||||
Operations and maintenance
|
8,483
|
4,499
|
3,984
|
|||||||||
Selling, general and administrative
|
28,370
|
49,749
|
(21,379
|
)
|
||||||||
Loss on mitigation sales
|
208
|
-
|
208
|
|||||||||
Depreciation and amortization
|
5,254
|
1,691
|
3,563
|
|||||||||
Total operating expenses
|
110,531
|
89,288
|
21,243
|
|||||||||
Operating loss
|
(36,001
|
)
|
(59,337
|
)
|
23,336
|
|||||||
Interest expense
|
13,890
|
3,284
|
10,606
|
|||||||||
Other expense (income), net
|
611
|
(2,575
|
)
|
3,186
|
||||||||
Loss on extinguishment of debt, net
|
9,557
|
-
|
9,557
|
|||||||||
Loss before taxes
|
(60,059
|
)
|
(60,046
|
)
|
(13
|
)
|
||||||
Tax (benefit) expense
|
(4
|
)
|
246
|
(250
|
)
|
|||||||
Net loss
|
$
|
(60,055
|
)
|
$
|
(60,292
|
)
|
$
|
(237
|
)
|
• |
Our historical financial results do not include significant projects that are near completion. Our results of operations for the first quarter of 2020 include our Montego Bay Terminal, Miami Facility, sales from our Old Harbour Terminal to JPC, and certain industrial end-users. The CHP Plant commenced commercial operations
during March 2020, and our future results will include revenue and results operations from sales of gas, power and steam from the CHP Plant. We also expect that the San Juan Facility will become fully operational beginning in the second
quarter of 2020. Our current results also do not include revenue and operating results from other projects under development including the La Paz Terminal, the LNG regasification terminal and power plant in Puerto Sandino, Nicaragua (the
“Puerto Sandino Terminal”), the LNG terminal in Angola (the “Angola Terminal”), and the LNG terminal on the Shannon Estuary near Ballylongford, Ireland (the “Ireland Terminal”).
|
• |
Our historical financial results do not reflect the long term LNG supply agreement that will lower the cost of our LNG supply from 2022
to 2030. We currently purchase the majority of our supply of LNG from third parties. For the three months ended March 31, 2020, we sourced 95% of our LNG volumes from third parties. Our cost
of sales for the three months ended March 31, 2020, reflected an average cost of LNG purchased from third parties of $0.67 per gallon ($8.10 per MMBtu), predominately purchased under a firm
purchase commitment entered into in December 2018. During 2019, the market price for LNG dropped significantly, and we have executed a firm commitment to purchase 27.5 TBtus annually beginning in 2022 at prices that are expected to be
significantly lower than our current inventory balance. Further, we believe that we will take advantage of the current market pricing for LNG to supply our expanding operations, resulting in an overall lower average cost of LNG in future
periods.
|
Three Months Ended March 31,
|
||||||||||||
(in thousands)
|
2020
|
2019
|
Change
|
|||||||||
Cash flows from:
|
||||||||||||
Operating activities
|
$
|
(51,311
|
)
|
$
|
(31,048
|
)
|
$
|
(20,263
|
)
|
|||
Investing activities
|
(56,048
|
)
|
(135,997
|
)
|
79,949
|
|||||||
Financing activities
|
305,589
|
483,193
|
(177,604
|
)
|
||||||||
Net increase in cash, cash equivalents, and restricted cash
|
$
|
198,230
|
$
|
316,148
|
$
|
(117,918
|
)
|
(in thousands)
|
Total
|
Less than 1 year[1]
|
Years 2 to 3
|
Year 4 to 5
|
More than 5 years
|
|||||||||||||||
Long-term debt obligations
|
$
|
1,383,025
|
$
|
50,137
|
$
|
164,791
|
$
|
851,234
|
$
|
316,863
|
||||||||||
Purchase obligations
|
1,669,942
|
208,464
|
376,360
|
306,242
|
778,876
|
|||||||||||||||
Operating Lease obligations
|
128,506
|
27,296
|