New Fortress Energy Inc. Q1 FY2026 earnings call

Completed Major Jamaica Asset Sale

• Closed the sale of its Jamaica business for $1.055 billion just hours before the call, generating $778 million in net proceeds and a $430 million accounting gain, exceeding both timing and price forecasts
• The sold assets included 20-year long-term contracts supplying roughly 60% of Jamaica's gas and power needs, with stable $125 million annual EBITDA; $227 million in asset-level debt was repaid as part of the transaction
• Net proceeds after all debt paydown, taxes and fees totaled almost $400 million, which will be retained to address near-term debt maturities, eliminating outstanding maturities until the second half of 2027

Credit Agreement Amendments

• Negotiated a waiver of the original 75% asset sale proceeds paydown requirement for super-priority debt in exchange for an early $270 million amortization payment on the revolving credit facility, plus a $55 million paydown on term loan A
• Eliminated the debt-to-capitalization covenant for term loan A, and aligned term loan A covenants with the revolving credit facility, with no covenant testing required until September 30, 2025
• The transaction reduces going concern risk that was disclosed in the 2024 10-K

Core Portfolio and Strategic Focus

• The company's near-term strategic priorities after the Jamaica sale are balance sheet simplification, extending debt duration to match long-dated assets, lowering debt costs, and shifting from complex corporate debt to asset-level financing
• The core portfolio currently includes 215 TBTUs of 20-year LNG supply, matched to 109 TBTUs of long-term high credit quality demand contracts (average 20-year term, credit ratings ranging from BB+ to BBB+), generating $500 million in annual margin
• Full utilization of the total 215 TBTU supply portfolio would grow annual core margin to $1 billion, creating significant long-term value and financing opportunities; the company controls all parts of the integrated logistics chain (supply, terminals, shipping, demand) to support efficient financing

Brazil Development Update

• The 624 MW Selba II combined cycle power plant is 95% complete, on track to reach commercial operation date (COD) in the second half of 2025, despite a 30-year record rainy season in Q1; high pressure hydro testing is underway, with first fire of the gas turbine expected at the end of August
• The 1.6 GW PortoSan open cycle power plant is 54% complete, more than 10% ahead of original schedule, with 2 of 3 gas turbines already installed; it is on track for COD by mid-2026
• Both projects have long-term inflation-linked contracts with strong credit counterparties: Selba II has a 25-year 100% take-or-pay PPA, while PortoSan has a 15-year capacity contract with the Brazilian National Grid
• The planned 2025 Brazil capacity auction was delayed from June but is still expected to occur in 2025; the company is positioned to offer over 2 GW of its own projects, and has received gas supply requests from more than 3 GW of third-party projects, demonstrating market confidence in its integrated LNG-to-power platform

Puerto Rico Activity

• Puerto Rico's antiquated energy system (average plant age >30 years, 50% of generation running on oil/diesel) has clear near and long-term growth opportunities, including temporary emergency power, conversion of 925 MW of diesel generation to natural gas (which would cut annual fuel costs by ~$300 million), and new long-term generation
• The company is the long-term gas supplier for the first new power generation PPA signed in Puerto Rico in 30 years; its San Juan terminal recently accommodated its first large vessel after channel widening, cutting costs and increasing terminal capacity
• The company will evaluate all upcoming Puerto Rico RFPs for temporary power, gas supply and new generation

FSRU Subcharter Update

• Two surplus FSRUs (Eskimo and Freeze) have been re-let to third parties at higher rates, with two additional re-lets in advanced discussions; total projected future earnings from these transactions is ~$300 million, adding up to $50 million in annual EBITDA
• The company may novate or sell these subcharters to generate an estimated $200 million in upfront one-time gains, which is under evaluation

FEMA Claim Update

• The company's $659 million FEMA claim for damage to Puerto Rican assets is progressing with high engagement from the Army Corps of Engineers, and management expects a near-term resolution while remaining optimistic about the outcome

Total segment operating margin for Q1 2025 was $106 million, compared to $240 million in Q4 2024. Core SG&A for Q1 2025 was $34 million, flat with Q4 2024. GAAP net loss for Q1 2025 was $200 million, equal to a loss of $0.73 per share, with no material one-time items leading adjusted EPS to match GAAP EPS. Adjusted EBITDA for Q1 2025 was $82 million. Ending Q1 2025 cash on hand was $448 million, with $275 million available under revolving credit facilities; pro forma liquidity after Jamaica sale proceeds reached over $1.1 billion.

• Core earnings through the first half of 2025 are expected to remain consistent with Q1 2025 levels, with earnings accelerating in the second half as Brazil assets reach commercial operation
• Full-year 2025 EBITDA including one-time gains is projected to be $1.25 to $1.5 billion, which is an upward revision from the company's previous full-year estimate
• Core SG&A for the remaining three quarters of 2025 is forecast to be $30 million per quarter, down from $34 million in Q1 2025
• Management plans to complete full refinancing of the entire corporate balance sheet over the next 12 months, transitioning to asset-level financing aligned with the 20-year duration of core cash flows, which will lower debt costs dramatically

• Resolution timing and final award amount for the $659 million FEMA claim cannot be accurately forecast, as with all government proceedings
• The 2025 Brazil capacity auction was delayed from its original June date, creating short-term uncertainty, though management believes the delay is temporary and underlying demand for new generation remains strong
• The Puerto Rico temporary power RFP has no guaranteed minimum dispatch, making the opportunity economically less attractive than longer-term gas supply and generation opportunities
• Restricted cash is almost entirely earmarked for Brazil construction CapEx, limiting near-term flexibility for other projects; FLNG2 construction pacing will be slowed to preserve cash until balance sheet refinancing is complete
• The company's complex legacy corporate capital structure has obscured underlying asset value for investors, and there is no guarantee that asset-level refinancing will be completed on favorable terms

Q: Almost all restricted cash on the balance sheet is tied to Brazil CapEx, but are there other restricted cash holdings and what hurdles exist to free that cash up? / A: The vast majority of restricted cash is dedicated to the under-construction Selba and PortoSem power plants in Brazil. Approximately $40 to $50 million is restricted for other credit instruments, of which $30 million will be freed up as a result of the Jamaica transaction, with the remainder staying restricted as collateral for other credit enhancements. /n Q: With improved liquidity post-Jamaica sale and company debt trading at a market discount, is the company considering opportunistic open market debt repurchases? / A: The company's near-term priority after the Jamaica sale is full refinancing of the corporate balance sheet over 12 months, shifting to asset-level financing for the core $500 million annual 20-year duration cash flow portfolio. After successful refinancing, the company will consider opportunistic debt repurchases at a discount as part of the overall balance sheet cleanup. The current $1.1+ billion in liquidity eliminates near-term maturity risk, allowing management to focus on aligning debt terms with asset duration to drive shareholder value. /n Q: Given that Plaquemines and CP2 LNG volumes are not coming online imminently, how is the company bridging its LNG supply needs for current contracted demand? / A: The company is well-positioned to meet current demand, as the operational FLNG1 facility is already producing at nameplate capacity, with additional upside expected from an upcoming planned outage and debottlenecking that will bring total capacity to 90 TBTUs. Current contracted demand is stepwise, with only Norse Hydro volumes needed this year, Selba volumes starting in H2 2026, and large Puerto Rico volumes starting in 2028, giving a balanced supply-demand profile with 106 TBTUs of existing supply still available for future growth. /n Q: Could lingering concerns about the company's past balance sheet liquidity impact bidding outcomes for Brazil and Puerto Rico opportunities with regulators and counterparties? / A: The company earned its competitive position by building critical infrastructure in both markets over many years, and now has over $1 billion in liquidity to support future projects. Underlying demand for new generation in Brazil remains strong despite the auction delay, and the company's Barcarena Terminal is well-positioned to support new projects. Management notes that disaggregating the portfolio reveals $500 million of 20-year investment-grade adjacent cash flow, which provides a strong foundation to complete planned asset-level refinancing and support future growth.