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 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Large accelerated filer ☐ |
||
Non-accelerated filer ☐ |
Smaller reporting company |
|
Emerging growth company |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
“ |
ii |
||
iii |
||
1 |
||
Item 1. |
1 |
|
Item 2. |
25 |
|
Item 3. |
38 |
|
Item 4. |
39 |
|
40 |
||
Item 1. |
40 |
|
Item 1A. |
40 |
|
Item 2. |
71 |
|
Item 3. |
71 |
|
Item 4. |
71 |
|
Item 5. |
71 |
|
Item 6. |
74 |
|
76 |
||
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; |
| • | impacts of the COVID-19 pandemic on our or our customers’ demand or 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; |
| • | cyclical or other changes in the demand for and price of LNG and natural gas and alternative fuels including oil-based fuels; |
| • | 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; |
| • | 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; |
| • | risks related to the jurisdictions in which we do, or seek to do, business, particularly Florida, Puerto Rico, Jamaica, Angola, Nicaragua and other jurisdictions in the Caribbean; and |
| • | our inability to forecast the anticipated benefits of converting from a limited liability company to a corporation. |
| Item 1. | Financial Statements. |
June 30, 2020 |
December 31, 2019 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Restricted cash |
||||||||
Receivables, net of allowances of $ |
||||||||
Inventory |
||||||||
Prepaid expenses and other current assets |
||||||||
Total current assets |
||||||||
Restricted cash |
||||||||
Construction in progress |
||||||||
Property, plant and equipment, net |
||||||||
Right-of-use assets |
||||||||
Intangible assets, net |
||||||||
Finance leases, net |
||||||||
Investment in equity securities |
||||||||
Deferred tax assets, net |
||||||||
Other non-current assets |
||||||||
Total assets |
$ |
$ |
||||||
Liabilities |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ |
$ |
||||||
Accrued liabilities |
||||||||
Current lease liabilities |
||||||||
Due to affiliates |
||||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Long-term debt |
||||||||
Non-current lease liabilities |
||||||||
Deferred tax liabilities, net |
||||||||
Other long-term liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingences (Note 18) |
||||||||
Stockholders’ equity |
||||||||
Class A shares, |
||||||||
Treasury shares, |
( |
) |
||||||
Class B shares, |
||||||||
Accumulated deficit |
( |
) |
( |
) |
||||
Accumulated other comprehensive income (loss) |
( |
) |
||||||
Total stockholders' equity attributable to NFE |
||||||||
Non-controlling interest |
||||||||
Total stockholders' equity |
||||||||
Total liabilities and stockholders' equity |
$ |
$ |
||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Revenues |
||||||||||||||||
Operating revenue |
$ |
$ |
$ |
$ |
||||||||||||
Other revenue |
||||||||||||||||
Total revenues |
||||||||||||||||
Operating expenses |
||||||||||||||||
Cost of sales |
||||||||||||||||
Operations and maintenance |
||||||||||||||||
Selling, general and administrative |
||||||||||||||||
Contract termination charges and loss on mitigation sales |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
Total operating expenses |
||||||||||||||||
Operating loss |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Interest expense |
||||||||||||||||
Other expense (income), net |
( |
) |
||||||||||||||
Loss on extinguishment of debt, net |
||||||||||||||||
Loss before taxes |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Tax expense |
||||||||||||||||
Net loss |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Net loss attributable to non-controlling interest |
||||||||||||||||
Net loss attributable to stockholders |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
Net loss per share – basic and diluted |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
Weighted average number of shares outstanding – basic and diluted |
||||||||||||||||
Other comprehensive loss: |
||||||||||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
Unrealized gain on currency translation adjustment |
( |
) |
( |
) |
||||||||||||
Comprehensive loss |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Comprehensive loss attributable to non-controlling interest |
||||||||||||||||
Comprehensive loss attributable to stockholders |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
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 |
- |
$ |
- |
$ |
$ |
- |
$ |
- |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
||||||||||||||||||||||||||||||||
Cumulative effect of accounting change (ASC 842) |
- |
- |
- |
- |
- |
- |
- |
- |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
Net loss |
- |
- |
- |
- |
- |
- |
- |
- |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
Other comprehensive loss |
- |
- |
- |
- |
- |
- |
- |
- |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
Share-based compensation expense |
- |
- |
- |
- |
- |
- |
- |
|||||||||||||||||||||||||||||||||||||||||
Issuance of shares for vested RSUs |
- |
- |
- |
- |
- |
- |
- |
|||||||||||||||||||||||||||||||||||||||||
Shares withheld from employees related to share-based compensation, at cost |
- |
- |
- |
- |
- |
- |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 |
- |
$ |
- |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
||||||||||||||||||||||||||||||
Net loss |
- |
- |
- |
- |
- |
- |
- |
- |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
Other comprehensive income |
- |
- |
- |
- |
- |
- |
- |
- |
||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense |
- |
- |
- |
- |
- |
- |
- |
|||||||||||||||||||||||||||||||||||||||||
Issuance of shares for vested RSUs |
- |
- |
- |
- |
- |
- |
- |
|||||||||||||||||||||||||||||||||||||||||
Shares withheld from employees related to share-based compensation, at cost |
- |
- |
- |
- |
- |
- |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||||
Exchange of NFI units |
- |
- |
( |
) |
- |
- |
- |
- |
- |
( |
) |
- |
||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 |
- |
$ |
- |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
$ |
||||||||||||||||||||||||||||||||
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 |
$ |
$ |
$ |
- |
$ |
- |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
||||||||||||||||||||||||||||||||||
Activity prior to the IPO and related organizational transactions: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
- |
- |
- |
- |
- |
- |
- |
- |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
Effects of the IPO and related organizational transactions: |
||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A shares in the IPO, net of underwriting discount and offering costs |
- |
- |
- |
- |
- |
- |
- |
- |
||||||||||||||||||||||||||||||||||||||||
Effects of the reorganization transactions |
( |
) |
( |
) |
- |
- |
- |
|||||||||||||||||||||||||||||||||||||||||
Activity subsequent to the IPO and related organizational transactions: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
- |
- |
- |
- |
- |
- |
- |
- |
( |
) |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||||||||
Share-based compensation expense |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 |
$ |
$ |
$ |
- |
$ |
- |
$ |
( |
) |
$ |
$ |
$ |
||||||||||||||||||||||||||||||||||||
Net loss |
- |
- |
- |
- |
- |
- |
- |
- |
( |
) |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||||||||
Share-based compensation expense |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 |
$ |
$ |
$ |
- |
$ |
- |
$ |
( |
) |
$ |
$ |
$ |
||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, |
||||||||
2020 |
2019 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
||
Adjustments for: |
||||||||
Amortization of deferred financing costs |
||||||||
Depreciation and amortization |
||||||||
Contract termination charges and loss on mitigation sales |
||||||||
Loss on extinguishment of debt, net |
||||||||
Deferred taxes |
||||||||
Change in value of Investment in equity securities |
||||||||
Share-based compensation |
||||||||
Other |
||||||||
(Increase) in receivables |
( |
) |
( |
) |
||||
(Increase) in inventories |
( |
) |
( |
) |
||||
(Increase) in other assets |
( |
) |
( |
) |
||||
Decrease in right-of-use assets |
||||||||
Increase in accounts payable/accrued liabilities |
||||||||
(Decrease) Increase in amounts due to affiliates |
( |
) |
||||||
(Decrease) in lease liabilities |
( |
) |
||||||
Increase in other liabilities |
||||||||
Net cash used in operating activities |
( |
) |
( |
) |
||||
Cash flows from investing activities |
||||||||
Capital expenditures |
( |
) |
( |
) |
||||
Principal payments received on finance lease, net |
||||||||
Net cash used in investing activities |
( |
) |
( |
) |
||||
Cash flows from financing activities |
||||||||
Proceeds from borrowings of debt |
||||||||
Payment of deferred financing costs |
( |
) |
( |
) |
||||
Repayment of debt |
( |
) |
( |
) |
||||
Proceeds from IPO |
||||||||
Payments related to tax withholdings for share-based compensation |
( |
) |
||||||
Payment of offering costs |
( |
) |
||||||
Net cash provided by financing activities |
||||||||
Net increase in cash, cash equivalents and restricted cash |
||||||||
Cash, cash equivalents and restricted cash – beginning of period |
||||||||
Cash, cash equivalents and restricted cash – end of period |
$ |
$ |
||||||
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 |
$ |
( |
) |
$ |
( |
) |
||
| 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 |
| (e) | Contract termination charges and loss on mitigation sales |
| 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 |
June 30, 2020 |
December 31, 2019 |
|||||||
Contract assets - current |
$ |
$ |
||||||
Contract assets - non-current |
||||||||
Total contract assets |
$ |
$ |
||||||
Contract liability |
$ |
$ |
||||||
Revenue recognized in the year from: |
||||||||
Amounts included in contract liability at the beginning of the year |
$ |
$ |
||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Development services revenue |
$ |
$ |
$ |
$ |
||||||||||||
Lease and other revenue |
||||||||||||||||
Total other revenue |
$ |
$ |
$ |
$ |
||||||||||||
Period |
Revenue |
|||
Remainder of 2020 |
$ |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Thereafter |
||||
Total |
$ |
|||
| 5. | Leases |
Three Months Ended June 30, 2020 |
Six Months Ended June 30, 2020 |
|||||||
Operating lease cost: |
||||||||
Fixed lease cost |
$ |
$ |
||||||
Variable lease cost |
||||||||
Short-term lease cost |
||||||||
Lease cost - Cost of Sales |
$ |
$ |
||||||
Lease cost - Operations and maintenance |
||||||||
Lease cost - Selling, general and administrative |
||||||||
Capitalized lease cost |
||||||||
Six Months Ended June 30, 2020 |
||||
Operating cash outflows for operating lease liabilities |
$ |
|||
Right-of-use assets obtained in exchange for new operating lease liabilities |
||||
Operating Leases |
||||
Due remainder of 2020 |
$ |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Thereafter |
||||
Total lease payments |
||||
Less: effects of discounting |
||||
Present value of lease liabilities |
$ |
|||
Current lease liability |
$ |
|||
Non-current lease liability |
||||
Year ending December 31: |
||||
2020 |
$ |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Thereafter |
||||
Total |
$ |
|||
June 30, 2020 |
||||
Property, plant and equipment |
$ |
|||
Accumulated depreciation |
( |
) |
||
Property, plant and equipment, net |
$ |
|||
Future cash receipts |
||||||||
Financing leases |
Operating leases |
|||||||
Remainder of 2020 |
$ |
$ |
||||||
2021 |
||||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
Thereafter |
||||||||
Total |
$ |
$ |
||||||
Less: Imputed interest |
||||||||
Present value of total lease receipts |
$ |
|||||||
Current finance leases, net |
$ |
|||||||
Non-current finance leases, net |
||||||||
| 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). |
June 30, 2020 |
|||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Valuation technique |
|||||||||||||
Assets |
|||||||||||||||||
Cash and cash equivalents |
$ |
$ |
$ |
$ |
Market approach |
||||||||||||
Restricted cash |
Market approach |
||||||||||||||||
Investment in equity securities |
Market approach |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
|||||||||||||
Liabilities |
|||||||||||||||||
Derivative liability¹ |
$ |
$ |
$ |
$ |
Income approach |
||||||||||||
Equity agreement² |
Income approach |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
|||||||||||||
December 31, 2019 |
|||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Valuation technique |
|||||||||||||
Assets |
|||||||||||||||||
Cash and cash equivalents |
$ |
$ |
$ |
$ |
Market approach |
||||||||||||
Restricted cash |
Market approach |
||||||||||||||||
Investment in equity securities |
Market approach |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
|||||||||||||
Liabilities |
|||||||||||||||||
Derivative liability¹ |
$ |
$ |
$ |
$ |
Income approach |
||||||||||||
Equity agreement² |
Income approach |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
|||||||||||||
| (1) |
| (2) |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Fair value adjustment - Loss/(gain) |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
||||||||
Currency translation adjustment - Loss |
||||||||||||||||
| 7. | Restricted cash |
June 30, 2020 |
December 31, 2019 |
|||||||
Collateral for performance under customer agreements |
$ |
$ |
||||||
Collateral for LNG purchases |
||||||||
Collateral for letters of credit and performance bonds |
||||||||
Debt service reserve account |
||||||||
Other restricted cash |
||||||||
Total restricted cash |
$ |
$ |
||||||
Current restricted cash |
$ |
$ |
||||||
Non-current restricted cash |
||||||||
| 8. | Inventory |
June 30, 2020 |
December 31, 2019 |
|||||||
LNG and natural gas inventory |
$ |
$ |
||||||
Automotive diesel oil inventory |
||||||||
Materials, supplies and other |
||||||||
Total inventory |
$ |
$ |
||||||
| 9. | Prepaid expenses and other current assets |
June 30, 2020 |
December 31, 2019 |
|||||||
Prepaid expenses |
$ |
$ |
||||||
Prepaid LNG |
||||||||
Due from affiliates (Note 21) |
||||||||
Other current assets |
||||||||
Total prepaid expenses and other current assets |
$ |
$ |
||||||
| 10. | Investment in equity securities |
| 11. | Construction in progress |
June 30, 2020 |
||||
Balance at beginning of period |
$ |
|||
Additions |
||||
Transferred to property, plant and equipment, net (Note 12) |
( |
) |
||
Balance at end of period |
$ |
|||
| 12. | Property, plant and equipment, net |
June 30, 2020 |
December 31, 2019 |
|||||||
CHP facilities |
$ |
$ |
||||||
Terminal and power plant equipment |
||||||||
LNG liquefaction facilities |
||||||||
Gas terminals |
||||||||
Gas pipelines |
||||||||
ISO containers and other equipment |
||||||||
Land |
||||||||
Leasehold improvements |
||||||||
Accumulated depreciation |
( |
) |
( |
) |
||||
Total property, plant and equipment, net |
$ |
$ |
||||||
| 13. | Intangible assets |
June 30, 2020 |
||||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
Weighted Average Life |
|||||||||||||
Definite-lived intangible assets |
||||||||||||||||
Shannon LNG permits |
$ |
$ |
$ |
|||||||||||||
Easements |
||||||||||||||||
Indefinite-lived intangible assets |
||||||||||||||||
Easements |
- |
n/a |
||||||||||||||
Total intangible assets |
$ |
$ |
$ |
|||||||||||||
December 31, 2019 |
||||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
Weighted Average Life |
|||||||||||||
Definite-lived intangible assets |
||||||||||||||||
Shannon LNG leases and permits |
$ |
$ |
$ |
|||||||||||||
Easements |
||||||||||||||||
Indefinite-lived intangible assets |
||||||||||||||||
Easements |
- |
n/a |
||||||||||||||
Total intangible assets |
$ |
$ |
$ |
|||||||||||||
| 14. | Other non-current assets |
June 30, 2020 |
December 31, 2019 |
|||||||
Nonrefundable deposit |
$ |
$ |
||||||
Contract asset (Note 4) |
||||||||
Cost to fulfill (Note 4) |
||||||||
Unbilled receivables (Note 4) |
||||||||
Upfront payments to customers |
||||||||
Port access rights and initial lease costs |
||||||||
Other |
||||||||
Total other non-current assets |
$ |
$ |
||||||
| 15. | Accrued liabilities |
June 30, 2020 |
December 31, 2019 |
|||||||
Accrued contract termination charges |
$ |
$ |
||||||
Accrued construction costs |
||||||||
Accrued interest |
||||||||
Accrued bonuses |
||||||||
Other accrued expenses |
||||||||
Total accrued liabilities |
$ |
$ |
||||||
| 16. | Debt |
June 30, 2020 |
December 31, 2019 |
|||||||
Credit Agreement, due |
$ |
$ |
||||||
Term Loan Facility, due |
||||||||
Senior Secured Bonds, due |
||||||||
Senior Secured Bonds, due |
||||||||
Senior Unsecured Bonds, due |
||||||||
Total debt |
$ |
$ |
||||||
Three months ended |
Six months ended |
|||||||||||||||
June 30, 2020 |
June 30, 2019 |
June 30, 2020 |
June 30, 2019 |
|||||||||||||
Interest costs: |
||||||||||||||||
Interest per contractual rates |
$ |
$ |
$ |
$ |
||||||||||||
Amortization of debt issuance costs |
||||||||||||||||
Total interest costs |
||||||||||||||||
Capitalized interest |
||||||||||||||||
Total interest expense |
$ |
$ |
$ |
$ |
||||||||||||
| 17. | Income taxes |
| 18. | Commitments and contingencies |
| 19. | Earnings per share |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, 2020 |
June 30, 2019 |
June 30, 2020 |
June 30, 2019 |
|||||||||||||
Numerator: |
||||||||||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
Less: net loss attributable to non-controlling interests |
||||||||||||||||
Net loss attributable to Class A shares |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
Denominator: |
||||||||||||||||
Weighted-average shares-basic and diluted |
||||||||||||||||
Net loss per share - basic and diluted |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
June 30, 2020 |
June 30, 2019 |
|||||||
Unvested RSUs1 |
||||||||
Class B shares2 |
||||||||
Shannon Equity Agreement shares3 |
||||||||
Total |
||||||||
| 1 |
| 2 |
| 3 |
| 20. | Share-based compensation |
Restricted Share Units |
Weighted-average grant date fair value per share |
|||||||
Non-vested RSUs as of December 31, 2019 |
$ |
|||||||
Granted |
||||||||
Vested and shares issued |
( |
) |
||||||
Forfeited |
( |
) |
||||||
Non-vested RSUs as of June 30, 2020 |
$ |
|||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Operations and maintenance |
$ |
$ |
$ |
$ |
||||||||||||
Selling, general and administrative |
||||||||||||||||
Total share-based compensation expense |
$ |
$ |
$ |
$ |
||||||||||||
| 21. | Related party transactions |
June 30, 2020 |
December 31, 2019 |
|||||||
Amounts due to affiliates |
$ |
$ |
||||||
Amounts due from affiliates |
||||||||
| 22. | Subsequent events |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||||
2020 |
2019 |
Change |
2020 |
2019 |
Change |
|||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Operating revenue |
$ |
76,177 |
$ |
31,738 |
$ |
44,439 |
$ |
139,679 |
$ |
57,876 |
$ |
81,803 |
||||||||||||
Other revenue |
18,389 |
8,028 |
10,361 |
29,417 |
11,841 |
17,576 |
||||||||||||||||||
Total revenues |
94,566 |
39,766 |
54,800 |
169,096 |
69,717 |
99,379 |
||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||
Cost of sales |
69,899 |
44,043 |
25,856 |
138,115 |
77,392 |
60,723 |
||||||||||||||||||
Operations and maintenance |
9,500 |
5,403 |
4,097 |
17,983 |
9,902 |
8,081 |
||||||||||||||||||
Selling, general and administrative |
31,846 |
32,169 |
(323 |
) |
60,216 |
81,918 |
(21,702 |
) |
||||||||||||||||
Contract termination charges and loss on mitigation sales |
123,906 |
- |
123,906 |
124,114 |
- |
124,114 |
||||||||||||||||||
Depreciation and amortization |
7,620 |
2,110 |
5,510 |
12,874 |
3,801 |
9,073 |
||||||||||||||||||
Total operating expenses |
242,771 |
83,725 |
159,046 |
353,302 |
173,013 |
180,289 |
||||||||||||||||||
Operating loss |
(148,205 |
) |
(43,959 |
) |
(104,246 |
) |
(184,206 |
) |
(103,296 |
) |
(80,910 |
) |
||||||||||||
Interest expense |
17,198 |
6,199 |
10,999 |
31,088 |
9,483 |
21,605 |
||||||||||||||||||
Other expense (income), net |
999 |
920 |
79 |
1,610 |
(1,655 |
) |
3,265 |
|||||||||||||||||
Loss on extinguishment of debt, net |
- |
- |
- |
9,557 |
- |
9,557 |
||||||||||||||||||
Loss before taxes |
(166,402 |
) |
(51,078 |
) |
(115,324 |
) |
(226,461 |
) |
(111,124 |
) |
(115,337 |
) |
||||||||||||
Tax expense |
117 |
155 |
(38 |
) |
113 |
401 |
(288 |
) |
||||||||||||||||
Net loss |
$ |
(166,519 |
) |
$ |
(51,233 |
) |
$ |
(115,286 |
) |
$ |
(226,574 |
) |
$ |
(111,525 |
) |
$ |
(115,049 |
) |
||||||
| • | Recognition of $17,393 and $26,879 of development services revenue in Puerto Rico for the three and six months ended June 30, 2020, respectively, including conversion of the customer’s infrastructure within the San Juan Power Plant and gas used by our customer for testing and commissioning their assets. Development services revenue recognized in both the three and six months ended June 30, 2020 included $16,484 for the customer’s use of 19.3 million gallons (1.6 TBtu) of natural gas as part of commissioning their assets. |
| • | Lower revenue recognized for the infrastructure projects for customers of the CHP Plant. For the three and six months ended June 30, 2020, we recognized $102 and $687, respectively, for the completion of infrastructure projects for customers of the CHP Plant, as compared to $3,908 for the three and six months ended June 30, 2019. |
| • | Decrease in interest income associated with the direct financing lease of the Montego Bay Terminal, as all amounts recognized as revenue for activities at the Montego Bay Terminal were included in Operating revenue for the three months and six months ended June 30, 2020. |
| • | Recognition of $11,107 and $19,923 of costs associated with development services in Puerto Rico for the three and six months ended June 30, 2020, respectively, including conversion of the customer’s infrastructure within the San Juan Power Plant and gas used by our customer for testing and commissioning their assets. The weighted-average cost of LNG purchased from third parties for our customer’s commissioning activities was $0.49 per gallon ($5.94 per MMBtu) for the three and six months ended June 30, 2020. The weighted-average cost of our inventory balance for our inventory balance for our Puerto Rico operations as of June 30, 2020 was $0.56 per gallon ($6.75 per MMBtu). |
| • | Decrease in costs associated the infrastructure projects for customers of the CHP Plant of $3,438 and $2,906 for the three and six months ended June 30, 2020. For the three and six months ended June 30, 2020, we recognized $114 and $646 of costs associated with the completion of infrastructure projects for customers of the CHP Plant. For the three and six months ended June 30, 2019, $3,552 of costs associated with the completion of infrastructure projects for customers of the CHP Plant were recognized. |
| • | Our historical financial results do not include significant projects that are near completion. Our results of operations for the first half 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 results now 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 third 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 changes to our current long term LNG supply agreement as well a new LNG supply agreement that will lower the cost of our LNG supply through 2030. We currently purchase the majority of our supply of LNG from third parties. For the three and six months ended June 30, 2020, we sourced 96% of our LNG volumes from third parties. Our cost of sales for the three and six months ended June 30, 2020, reflected an average cost of LNG purchased from third parties for use in our Jamaican operations of $0.68 per gallon ($8.23 per MMBtu) and $0.67 per gallon ($8.16 per MMBtu), respectively, predominately purchased under a long term LNG supply agreement entered into in December 2018. During 2019, the market price for LNG declined significantly, and we have executed an LNG supply agreement to purchase 27.5 TBtus annually beginning in 2022 at prices that are expected to be significantly lower than our current inventory balance. In June 2020, we entered into an agreement to terminate our obligation to purchase LNG from our supplier for the remainder of 2020 in exchange for a payment of $105,000. We intend to purchase all volumes needed for our operations in the remainder of 2020 on the open market, significantly reducing our LNG supply costs. |
Six Months Ended June 30, |
||||||||||||
(in thousands) |
2020 |
2019 |
Change |
|||||||||
Cash flows from: |
||||||||||||
Operating activities |
$ |
(80,323 |
) |
$ |
(92,068 |
) |
$ |
11,745 |
||||
Investing activities |
(95,344 |
) |
(231,877 |
) |
136,533 |
|||||||
Financing activities |
306,025 |
481,110 |
(175,085 |
) |
||||||||
Net increase in cash, cash equivalents, and restricted cash |
$ |
130,358 |
$ |
157,165 |
$ |
(26,807 |
) |
|||||
(in thousands) |
Total |
Less than 1 year[1] |
Years 2 to 3 |
Year 4 to 5 |
More than 5 years |
|||||||||||||||
Long-term debt obligations |
$ |
1,399,922 |
$ |
39,600 |
$ |
189,125 |
$ |
854,334 |
$ |
316,863 |
||||||||||
Purchase obligations |
1,452,703 |
3,654 |
380,656 |
303,121 |
765,272 |
|||||||||||||||
Operating Lease obligations |
116,338 |
14,737 |
53,705 |
14,116 |
33,780 |
|||||||||||||||
Total |
$ |
2,968,963 |
$ |
57,991 |
$ |
623,486 |
$ |
1,171,571 |
$ |
1,115,915 |
||||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risks. |
| Item 4. | Controls and Procedures. |
| Item 1. | Legal Proceedings. |
| Item 1A. | Risk Factors. |
| • | inability to achieve our target costs for the purchase, liquefaction and export of natural gas and/or LNG and our target pricing for long-term contracts; |
| • | failure to develop cost-effective logistics solutions; |
| • | failure to manage expanding operations in the projected time frame; |
| • | inability to structure innovative and profitable energy-related transactions as part of our sales and trading operations and to optimally price and manage position, performance and counterparty risks; |
| • | inability, or failure, of any customer or contract counterparty to perform their contractual obligations to us (for further discussion of counterparty risk, see “—Our current ability to generate cash is substantially dependent upon the entry into and performance by customers under long-term contracts that we have entered into or will enter into in the near future, and we could be materially and adversely affected if any customer fails to perform its contractual obligations for any reason, including nonpayment and nonperformance, or if we fail to enter into such contracts at all.”); |
| • | inability to develop infrastructure, including our Terminals and Liquefaction Facilities, as well as other future projects, in a timely and cost-effective manner; |
| • | inability to attract and retain personnel in a timely and cost-effective manner; |
| • | failure of investments in technology and machinery, such as liquefaction technology or LNG tank truck technology, to perform as expected; |
| • | increases in competition which could increase our costs and undermine our profits; |
| • | inability to source LNG and/or natural gas in sufficient quantities and/or at economically attractive prices; |
| • | failure to anticipate and adapt to new trends in the energy sector in the U.S., Jamaica, the Caribbean, Mexico, Ireland, Nicaragua, Angola and elsewhere; |
| • | increases in operating costs, including the need for capital improvements, insurance premiums, general taxes, real estate taxes and utilities, affecting our profit margins; |
| • | inability to raise significant additional debt and equity capital in the future to implement our strategy as well as to operate and expand our business; |
| • | general economic, political and business conditions in the U.S., Jamaica, the Caribbean, Mexico, Ireland, Nicaragua, Angola and in the other geographic areas in which we intend to operate; |
| • | the severity and duration of world health events, including the recent COVID-19 pandemic and related economic and political impacts on our or our customers’ or suppliers’ operations and financial status; |
| • | inflation, depreciation of the currencies of the countries in which we operate and fluctuations in interest rates; |
| • | failure to win new bids or contracts on the terms, size and within the time frame we need to execute our business strategy; |
| • | failure to obtain approvals from governmental regulators and relevant local authorities for the construction and operation of potential future projects and other relevant approvals; |
| • | 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; or |
| • | existing and future governmental laws and regulations. |
| • | upon the occurrence of certain events of force majeure; |
| • | if we fail to make available specified scheduled cargo quantities; |
| • | the occurrence of certain uncured payment defaults; |
| • | the occurrence of an insolvency event; |
| • | the occurrence of certain uncured, material breaches; and |
| • | if we fail to commence commercial operations or achieve financial close within the agreed timeframes. |
| • | additions to competitive regasification capacity in North America, Europe, Asia and other markets, which could divert LNG or natural gas from our business; |
| • | imposition of tariffs by China or any other jurisdiction on imports of LNG from the United States; |
| • | insufficient or oversupply of natural gas liquefaction or export capacity worldwide; |
| • | insufficient LNG tanker capacity; |
| • | weather conditions and natural disasters; |
| • | reduced demand and lower prices for natural gas; |
| • | increased natural gas production deliverable by pipelines, which could suppress demand for LNG; |
| • | decreased oil and natural gas exploration activities, including shut-ins and possible proration, which have begun and may continue to decrease the production of natural gas; |
| • | cost improvements that allow competitors to offer LNG regasification services at reduced prices; |
| • | changes in supplies of, and prices for, alternative energy sources such as coal, oil, nuclear, hydroelectric, wind and solar energy, which may reduce the demand for natural gas; |
| • | changes in regulatory, tax or other governmental policies regarding imported or exported LNG, natural gas or alternative energy sources, which may reduce the demand for imported or exported LNG and/or natural gas; |
| • | political conditions in natural gas producing regions; |
| • | adverse relative demand for LNG compared to other markets, which may decrease LNG imports into or exports from North America; and |
| • | cyclical trends in general business and economic conditions that cause changes in the demand for natural gas. |
| • | merge, consolidate or transfer all, or substantially all, of our assets; |
| • | incur additional debt or issue preferred shares; |
| • | make certain investments or acquisitions; |
| • | create liens on our or our subsidiaries’ assets; |
| • | sell assets; |
| • | pay dividends or otherwise make distributions on or repurchase our shares; |
| • | enter into transactions with affiliates; and |
| • | create dividend restrictions and other payment restrictions that affect our subsidiaries. |
| • | we may be unable to complete construction projects on schedule or at the budgeted cost due to the unavailability of required construction personnel or materials, accidents or weather conditions; |
| • | we may issue change orders under existing or future engineering, procurement and construction (“EPC”) contracts resulting from the occurrence of certain specified events that may give our customers the right to cause us to enter into change orders or resulting from changes with which we otherwise agree; |
| • | we will not receive any material increase in operating cash flows until a project is completed, even though we may have expended considerable funds during the construction phase, which may be prolonged; |
| • | we may construct facilities to capture anticipated future energy consumption growth in a region in which such growth does not materialize; |
| • | the completion or success of our construction projects may depend on the completion of a third-party construction project (e.g., additional public utility infrastructure projects) that we do not control and that may be subject to numerous additional potential risks, delays and complexities; |
| • | the purchase of the project company holding the rights to develop and operate the Ireland Terminal is subject to a number of contingencies, many of which are beyond our control and could cause us not to acquire the remaining interests of the project company or cause a delay in the construction of our Ireland Terminal; |
| • | we may not be able to obtain key permits or land use approvals including those required under environmental laws on terms that are satisfactory for our operations and on a timeline that meets our commercial obligations, and there may be delays, perhaps substantial in length, such as in the event of challenges by citizens groups or non-governmental organizations, including those opposed to fossil fuel energy sources; |
| • | we may be (and have been in select circumstances) subject to local opposition, including the efforts by environmental groups, which may attract negative publicity or have an adverse impact on our reputation; and |
| • | we may be unable to obtain rights-of-way to construct additional energy-related infrastructure or the cost to do so may be uneconomical. |
| • | design and engineer each of our facilities to operate in accordance with specifications; |
| • | engage and retain third-party subcontractors and procure equipment and supplies; |
| • | respond to difficulties such as equipment failure, delivery delays, schedule changes and failures to perform by subcontractors, some of which are beyond their control; |
| • | attract, develop and retain skilled personnel, including engineers; |
| • | post required construction bonds and comply with the terms thereof; |
| • | manage the construction process generally, including coordinating with other contractors and regulatory agencies; and |
| • | maintain their own financial condition, including adequate working capital. |
| • | increases in worldwide LNG production capacity and availability of LNG for market supply; |
| • | increases in demand for natural gas but at levels below those required to maintain current price equilibrium with respect to supply; |
| • | increases in the cost to supply natural gas feedstock to our liquefaction projects; |
| • | increases in the cost to supply LNG feedstock to our facilities; |
| • | decreases in the cost of competing sources of natural gas, LNG or alternate fuels such as coal, heavy fuel oil and ADO; |
| • | decreases in the price of LNG; and |
| • | displacement of LNG or fossil fuels more broadly by alternate fuels or energy sources or technologies (including but not limited to nuclear, wind, solar, biofuels and batteries) in locations where access to these energy sources is not currently available or prevalent. |
| • | natural disasters; |
| • | mechanical failures; |
| • | grounding, fire, explosions and collisions; |
| • | piracy; |
| • | human error; and |
| • | war and terrorism. |
| • | marine disasters; |
| • | piracy; |
| • | bad weather; |
| • | mechanical failures; |
| • | environmental accidents; |
| • | grounding, fire, explosions and collisions; |
| • | human error; and |
| • | war and terrorism. |
| • | death or injury to persons, loss of property or environmental damage; |
| • | delays in the delivery of cargo; |
| • | loss of revenues; |
| • | termination of charter contracts; |
| • | governmental fines, penalties or restrictions on conducting business; |
| • | higher insurance rates; and |
| • | damage to our reputation and customer relationships generally. |
| • | an inadequate number of shipyards constructing LNG tankers and a backlog of orders at these shipyards; |
| • | political or economic disturbances in the countries where the tankers are being constructed; |
| • | changes in governmental regulations or maritime self-regulatory organizations; |
| • | work stoppages or other labor disturbances at the shipyards, including as a result of the COVID-19 pandemic; |
| • | bankruptcy or other financial crisis of shipbuilders; |
| • | quality or engineering problems; |
| • | weather interference or a catastrophic event, such as a major earthquake, tsunami or fire; or |
| • | shortages of or delays in the receipt of necessary construction materials. |
| • | expected supply is less than the amount hedged; |
| • | the counterparty to the hedging contract defaults on its contractual obligations; or |
| • | there is a change in the expected differential between the underlying price in the hedging agreement and actual prices received. |
| • | lower economic activity, including as a result of the COVID-19 pandemic which has significantly affected Jamaica’s and other jurisdictions’ tourism industries; |
| • | an increase in oil, natural gas or petrochemical prices; |
| • | devaluation of the applicable currency; |
| • | higher inflation; or |
| • | an increase in domestic interest rates, |
| • | a majority of the board of directors consist of independent directors as defined under the rules of NASDAQ; |
| • | the nominating and governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
| • | the compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
| • | dividing our board of directors into three classes of directors, with each class serving staggered three-year terms; |
| • | providing that all vacancies, including newly created directorships, may, except as otherwise required by law, or, if applicable, the rights of holders of a series of preferred shares, only be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; |
| • | permitting special meetings of our shareholders to be called only by (i) the chairman of our board of directors, (ii) a majority of our board of directors, or (iii) a committee of our board of directors that has been duly designated by the board of directors and whose powers include the authority to call such meetings; |
| • | prohibiting cumulative voting in the election of directors; |
| • | establishing advance notice provisions for shareholder proposals and nominations for elections to the board of directors to be acted upon at meetings of the shareholders; and |
| • | providing that the board of directors is expressly authorized to adopt, or to alter or repeal our certain provisions of our organizational documents to the extent permitted by law. |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
| Item 3. | Defaults upon Senior Securities. |
| Item 4. | Mine Safety Disclosures. |
| Item 5. | Other Information. |
| Item 6. | Exhibits. |
Exhibit Number |
Description |
|
Certificate of Formation of New Fortress Energy LLC (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 (File No. 333-228339), filed with the SEC on November 9, 2018) |
||
Certificate of Amendment to Certificate of Formation of New Fortress Energy LLC (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-228339), filed with the SEC on November 9, 2018) |
||
First Amended and Restated Limited Liability Company Agreement of New Fortress Energy LLC, dated February 4, 2019 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Mutual Agreement, dated June 3, 2020, by and among New Fortress Energy LLC, Fortress Equity Partners GP, LLC, WRE 2012 Trust LLC, FEP HoldCo LLC, Wesley R Edens, Randal A Nardone, NFE SMRS Holdings LLC and NFE Sub LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on June 9, 2020) |
||
Amended and Restated Limited Liability Company Agreement of New Fortress Intermediate LLC, dated February 4, 2019 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
New Fortress Energy LLC 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form S-8 (File No. 333-229507), filed with the SEC on February 4, 2019) |
||
Form of Director Restricted Share Unit Award Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-228339), filed with the SEC on December 24, 2018) |
||
Form of Employee Restricted Share Unit Award Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001- 38790), filed with the Commission on May 15, 2019) |
||
Shareholders’ Agreement, dated February 4, 2019, by and among New Fortress Energy LLC, New Fortress Energy Holdings LLC, Wesley R. Edens and Randal A. Nardone (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Administrative Services Agreement, dated February 4, 2019, by and between New Fortress Intermediate LLC and FIG LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Edens) (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Guinta) (incorporated by reference to Exhibit 10.5 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Catterall) (incorporated by reference to Exhibit 10.7 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Grain) (incorporated by reference to Exhibit 10.8 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Griffin) (incorporated by reference to Exhibit 10.9 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Mack) (incorporated by reference to Exhibit 10.10 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Nardone) (incorporated by reference to Exhibit 10.11 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Wanner) (incorporated by reference to Exhibit 10.12 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
||
Indemnification Agreement (Wilkinson) (incorporated by reference to Exhibit 10.13 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019) |
Amendment Agreement dated as February 11, 2019 to Credit Agreement, dated as of August 15, 2018 and as amended and restated as of December 31, 2018, among New Fortress Intermediate LLC, NFE Atlantic Holdings LLC, the subsidiary guarantors from time to time party thereto, lenders parties thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (incorporated by reference to Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 26, 2019) |
||
Second Amendment Agreement, dated as of March 13, 2019 to the Credit Agreement, dated as of August 15, 2018 and as amended and restated as of December 31, 2018, and as amended as of February 11, 2019, among New Fortress Intermediate LLC, NFE Atlantic Holdings LLC, the subsidiary guarantors from time to time party thereto, lenders parties thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (incorporated by reference to Exhibit 10.26 to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 26, 2019) |
||
Engineering, Procurement and Construction Agreement for the Marcellus LNG Production Facility I, dated January 8, 2019, by and between Bradford County Real Estate Partners LLC and Black & Veatch Construction, Inc. (incorporated by reference to Exhibit 10.17 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-228339), filed with the SEC on January 25, 2019) |
||
Indemnification Agreement, dated as of March 17, 2019, by and between New Fortress Energy LLC and Yunyoung Shin (incorporated by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 26, 2019) |
||
Letter Agreement, dated as of December 3, 2019, by and between NFE Management LLC and Yunyoung Shin. (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 5, 2020) |
||
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
||
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
||
Certifications by Chief Executive Officer pursuant to Title 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002. |
||
Certifications by Chief Financial Officer pursuant to Title 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002. |
||
Plan of Conversion |
||
Certificate of Conversion to a Corporation of New Fortress Energy LLC. |
||
Certificate of Incorporation of New Fortress Energy Inc. |
||
By-Laws of New Fortress Energy Inc. |
||
101.INS* |
XBRL Instance Document |
|
101.SCH* |
XBRL Schema Document |
|
101.CAL* |
XBRL Calculation Linkbase Document |
|
101.LAB* |
XBRL Label Linkbase Document |
|
101.PRE* |
XBRL Presentation Linkbase Document |
|
101.DEF* |
XBRL Taxonomy Extension Definition Linkbase Document |
NEW FORTRESS ENERGY LLC |
||
Date: August 3, 2020 |
||
By: |
/s/ Wesley R. Edens |
|
Name: |
Wesley R. Edens |
|
Title: |
Chief Executive Officer and Chairman |
|
(Principal Executive Officer) |
||
Date: August 3, 2020 |
||
By: |
/s/ Christopher S. Guinta |
|
Name: |
Christopher S. Guinta |
|
Title: |
Chief Financial Officer |
|
(Principal Financial Officer) |
||
Date: August 3, 2020 |
||
By: |
/s/ Yunyoung Shin |
|
Name: |
Yunyoung Shin |
|
Title: |
Chief Accounting Officer |
|
(Principal Accounting Officer) |
||
| 1. |
I have reviewed this Quarterly Report on Form 10-Q (the “report”) of New Fortress Energy LLC (the “registrant”);
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
| Date: |
August 3, 2020
|
By:
|
/s/ Wesley R. Edens | ||
|
Wesley R. Edens
|
|||||
|
Chief Executive Officer
|
|||||
|
(Principal Executive Officer)
|
|||||
| 1. |
I have reviewed this Quarterly Report on Form 10-Q (the “report”) of New Fortress Energy LLC (the “registrant”);
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
| c. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
| Date: |
August 3, 2020
|
By:
|
/s/ Christopher S. Guinta | ||
|
Christopher S. Guinta
|
|||||
|
Chief Financial Officer
|
|||||
|
(Principal Financial Officer)
|
|||||
| (1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
| (2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
| Date: |
August 3, 2020
|
By:
|
/s/ Wesley R. Edens | ||
|
Wesley R. Edens
|
|||||
|
Chief Executive Officer
|
|||||
|
(Principal Executive Officer)
|
|||||
| (1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
| (2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
| Date: |
August 3, 2020
|
By:
|
/s/ Christopher S. Guinta | ||
|
Christopher S. Guinta
|
|||||
|
Chief Financial Officer
|
|||||
|
(Principal Financial Officer)
|
|||||
|
NEW FORTRESS ENERGY LLC
|
|||
|
By:
|
/s/ Cameron D. MacDougall
|
||
|
Name: Cameron D. MacDougall
|
|||
|
Title: General Counsel and Secretary
|
|||
|
Name
|
Address
|
|
Cameron D. MacDougall
|
New York, NY 10011
|
| /s/ Cameron D. MacDougall | |
|
Cameron D. MacDougall
|
|
|
Sole Incorporator
|
|
|
Page | |
|
ARTICLE I
|
||
|
OFFICES
|
||
|
Section 1.
|
Registered Office
|
1
|
|
Section 2.
|
Other Offices
|
1
|
|
ARTICLE II
|
||
|
MEETINGS OF STOCKHOLDERS
|
||
|
Section 1.
|
Place of Meetings
|
1
|
|
Section 2.
|
Annual Meetings
|
2
|
|
Section 3.
|
Special Meetings
|
3
|
|
Section 4.
|
Notice
|
3
|
|
Section 5.
|
Adjournments and Postponements
|
4
|
|
Section 6.
|
Quorum
|
4
|
|
Section 7.
|
Voting and Other Rights
|
5
|
|
Section 8.
|
Proxies and Voting
|
6
|
|
Section 9.
|
Consent of Stockholders in Lieu of Meeting
|
7
|
|
Section 10.
|
List of Stockholders Entitled to Vote
|
7
|
|
Section 11.
|
Record Date
|
8
|
|
Section 12.
|
Stock Ledger
|
9
|
|
Section 13.
|
Conduct of Meetings
|
10
|
|
Section 14.
|
Inspectors of Election
|
10
|
|
Section 15.
|
Nomination of Directors
|
10
|
|
Section 16.
|
Notice of Stockholder Business and Nominations
|
11
|
|
ARTICLE III
|
||
|
DIRECTORS
|
||
|
Section 1.
|
Duties and Powers
|
17
|
|
Section 2.
|
Meetings
|
20
|
|
Section 3.
|
Organization
|
21
|
|
Section 4.
|
Resignations and Removals of Directors
|
21
|
|
Section 5.
|
Quorum
|
21
|
|
Section 6.
|
Actions of the Board by Written Consent
|
22
|
|
Section 7.
|
Meetings by Means of Conference Telephone
|
22
|
|
Section 8.
|
Committees
|
23
|
|
Section 9.
|
Remuneration
|
24
|
|
Section 10.
|
Interested Directors
|
24
|
|
Section 11.
|
New Fortress Intermediate
|
25
|
|
ARTICLE IV
|
||
|
OFFICERS
|
||
|
Section 1.
|
General
|
25
|
|
Section 2.
|
Resignation and Removal
|
26
|
|
Section 3.
|
Voting Securities Owned by the Corporation
|
26
|
|
Section 4.
|
Chairman of the Board of Directors and Chief Executive Officer
|
27
|
|
Section 5.
|
Senior Officers
|
28
|
|
Section 6.
|
Treasurer and Assistant Treasurer
|
28
|
|
Section 7.
|
Secretary and Assistant Secretary
|
29
|
|
Section 8.
|
Other Officers
|
29 |
|
ARTICLE V
|
||
|
STOCK
|
||
|
Section 1.
|
Certificates
|
30
|
|
Section 2.
|
Signatures
|
30
|
|
Section 3.
|
Lost or Mutilated Certificates
|
31
|
|
Section 4.
|
Transfer of Shares
|
32
|
|
Section 5.
|
Settlement of Transactions
|
32
|
|
Section 6.
|
Dividend Record Date
|
32
|
|
Section 7.
|
Record Owners
|
33
|
|
Section 8.
|
Splits and Combinations
|
33
|
|
Section 9.
|
Class B Shares
|
34
|
|
ARTICLE VI
|
||
|
NOTICES
|
||
|
Section 1.
|
Notices
|
35
|
|
Section 2.
|
Waivers of Notice
|
36
|
|
ARTICLE VII
|
||
|
GENERAL PROVISIONS
|
||
|
Section 1.
|
Disbursements
|
37
|
|
Section 2.
|
Fiscal Year
|
37
|
|
Section 3.
|
Corporate Seal
|
37
|
|
Section 4.
|
Title to Corporation Assets
|
37
|
|
Section 5.
|
Construction
|
38
|
|
Section 6.
|
Formation
|
38
|
|
Section 7.
|
Records and Accounting
|
38
|
|
Section 8.
|
Reports
|
39
|
|
Section 9.
|
Invalidity of Provisions
|
40
|
|
Section 10.
|
Definitions
|
40
|
|
ARTICLE VIII
|
||
|
INDEMNIFICATION
|
||
|
Section 1.
|
Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation
|
45
|
|
Section 2.
|
Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation
|
46
|
|
Section 3.
|
Authorization of Indemnification
|
47
|
|
Section 4.
|
Good Faith Defined
|
47
|
|
Section 5.
|
Indemnification by a Court
|
48
|
|
Section 6.
|
Expenses Payable in Advance
|
48
|
|
Section 7.
|
Nonexclusivity of Indemnification and Advancement of Expenses
|
49 |
|
Section 8.
|
Insurance
|
49
|
|
Section 9.
|
Certain Definitions
|
50
|
|
Section 10.
|
Survival of Indemnification and Advancement of Expenses
|
51
|
|
Section 11.
|
Limitation on Indemnification
|
51
|
|
Section 12.
|
Indemnification of Employees and Agents
|
51
|
|
Section 13.
|
Indemnification with Respect to Employee Benefit Plans
|
51
|
|
ARTICLE IX
|
||
|
FORUM FOR ADJUDICATION OF CERTAIN DISPUTES
|
||
|
Section 1.
|
Forum for Adjudication of Certain Disputes
|
52
|
|
ARTICLE X
|
||
|
AMENDMENTS
|
||
|
Section 1.
|
General
|
53
|
|
Section 2.
|
Super-Majority Amendments
|
54
|
|
Section 3.
|
Amendments to be Adopted Solely by the Board of Directors
|
54
|
|
Section 4.
|
Amendment Requirements
|
56
|
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Current assets | ||
| Allowances for receivables | $ 0 | $ 0 |
| Stockholders' equity | ||
| Treasury shares (in shares) | 586,758 | 0 |
| Class A [Member] | ||
| Stockholders' equity | ||
| Common stock, shares issued (in shares) | 169,174,104 | 23,607,096 |
| Shares outstanding (in shares) | 168,587,346 | 23,607,096 |
| Class B [Member] | ||
| Stockholders' equity | ||
| Common stock, shares issued (in shares) | 0 | 144,342,572 |
| Shares outstanding (in shares) | 0 | 144,342,572 |
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Revenues | ||||
| Operating revenue | $ 76,177 | $ 31,738 | $ 139,679 | $ 57,876 |
| Other revenue | 18,389 | 8,028 | 29,417 | 11,841 |
| Total revenues | 94,566 | 39,766 | 169,096 | 69,717 |
| Operating expenses | ||||
| Cost of sales | 69,899 | 44,043 | 138,115 | 77,392 |
| Operations and maintenance | 9,500 | 5,403 | 17,983 | 9,902 |
| Selling, general and administrative | 31,846 | 32,169 | 60,216 | 81,918 |
| Contract termination charges and loss on mitigation sales | 123,906 | 0 | 124,114 | 0 |
| Depreciation and amortization | 7,620 | 2,110 | 12,874 | 3,801 |
| Total operating expenses | 242,771 | 83,725 | 353,302 | 173,013 |
| Operating loss | (148,205) | (43,959) | (184,206) | (103,296) |
| Interest expense | 17,198 | 6,199 | 31,088 | 9,483 |
| Other expense (income), net | 999 | 920 | 1,610 | (1,655) |
| Loss on extinguishment of debt, net | 0 | 0 | 9,557 | 0 |
| Loss before taxes | (166,402) | (51,078) | (226,461) | (111,124) |
| Tax expense | 117 | 155 | 113 | 401 |
| Net loss | (166,519) | (51,233) | (226,574) | (111,525) |
| Net loss attributable to non-controlling interest | 29,094 | 45,047 | 80,851 | 91,782 |
| Net loss attributable to stockholders | $ (137,425) | $ (6,186) | $ (145,723) | $ (19,743) |
| Net loss per share - basic and diluted (in dollars per share) | $ (2.40) | $ (0.28) | $ (3.49) | $ (1.09) |
| Weighted average number of shares outstanding - basic and diluted (in shares) | 57,341,215 | 22,114,002 | 41,771,849 | 18,154,939 |
| Other comprehensive loss: | ||||
| Net loss | $ (166,519) | $ (51,233) | $ (226,574) | $ (111,525) |
| Unrealized gain on currency translation adjustment | (520) | 0 | (151) | 0 |
| Comprehensive loss | (165,999) | (51,233) | (226,423) | (111,525) |
| Comprehensive loss attributable to non-controlling interest | 29,009 | 45,047 | 81,082 | 91,782 |
| Comprehensive loss attributable to stockholders | $ (136,990) | $ (6,186) | $ (145,341) | $ (19,743) |
Organization |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2020 | |||
| Organization [Abstract] | |||
| Organization |
New Fortress Energy LLC (“NFE,” together with its subsidiaries, the “Company”) is a Delaware limited liability company formed by New Fortress Energy Holdings LLC (“New Fortress Energy Holdings”) on August 6, 2018. The Company is a global integrated gas-to-power infrastructure company that seeks to use natural gas to satisfy the world’s large and growing power needs and is engaged in providing energy and logistical services to end-users worldwide seeking to convert their operating assets from diesel or heavy fuel oil to LNG. The Company currently sources LNG from a combination of its own liquefaction facility in Miami, Florida and purchases on the open market. The Company has liquefaction, regasification and power generation operations in the United States and Jamaica.
The Company manages, analyzes and reports on its business and results of operations on the basis of one operating segment. The chief operating decision maker makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis.
|
Significant accounting policies |
6 Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||
| Significant accounting policies [Abstract] | |||||||||||||
| Significant accounting policies |
The principle accounting policies adopted are set out below.
The accompanying unaudited interim condensed consolidated financial statements contained herein were prepared in accordance with GAAP and reflect all normal and recurring adjustments which are, in the opinion of management, necessary to provide a fair statement of the financial position, results of operations and cash flows of the Company for the interim periods presented. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned consolidated subsidiaries. The ownership interest of other investors in consolidated subsidiaries is recorded as a non-controlling interest. All significant intercompany transactions and balances have been eliminated on consolidation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2019.
On February 4, 2019, the Company completed an initial public offering (“IPO”) and a series of other transactions, in which the Company issued and sold 20,000,000 Class A shares at an IPO price of $14.00 per share. The Company’s Class A shares began trading on NASDAQ Global Select Market (“NASDAQ”) under the symbol “NFE” on January 31, 2019. Net proceeds from the IPO were $257.0 million, after deducting underwriting discounts and commissions and transaction costs. These proceeds were contributed to New Fortress Intermediate LLC (“NFI”), an entity formed in conjunction with the IPO, in exchange for 20,000,000 limited liability company units in NFI (“NFI LLC Units”). In addition, New Fortress Energy Holdings contributed all of its interests in consolidated subsidiaries that comprised substantially all of its historical operations to NFI in exchange for NFI LLC Units. In connection with the IPO, New Fortress Energy Holdings also received 147,058,824 Class B shares of the Company, which is equal to the number of NFI LLC Units held by New Fortress Energy Holdings immediately following the IPO. New Fortress Energy Holdings retained a significant interest in NFE through its ownership of 147,058,824 Class B shares, representing a 88.0% voting and non-economic interest. New Fortress Energy Holdings also had an 88.0% economic interest in NFI through its ownership of 147,058,824 of NFI LLC Units. New Fortress Energy Holdings has been determined to be NFE’s predecessor for accounting purposes.
On March 1, 2019, the underwriters of the IPO exercised their option to purchase an additional 837,272 Class A shares at the IPO price of $14.00 per share, less underwriting discounts, which resulted in $11.0 million in additional net proceeds after deducting $0.7 million of underwriting discounts and commissions, such that there were 20,837,272 outstanding Class A shares. In connection with the exercise of the underwriters’ option to purchase an additional 837,272 Class A shares, NFE contributed such additional net proceeds to NFI in exchange for 837,272 NFI LLC Units.
NFE is a holding company whose sole material asset is a controlling equity interest in NFI. As the sole managing member of NFI, NFE operates and controls all of the business and affairs of NFI, and through NFI and its subsidiaries, conducts the Company’s historical business. The contribution of the assets of New Fortress Energy Holdings and net proceeds from the IPO to NFI was treated as a reorganization of entities under common control. As a result, NFE presented the condensed consolidated balances sheets and statements of operations and comprehensive loss of New Fortress Energy Holdings for all periods prior to the IPO.
On June 3, 2020, the Company entered into a mutual agreement (the “Mutual Agreement”) with the members holding the majority voting interest in New Fortress Energy Holdings (“Exchanging Members”) and NFE Sub LLC (a wholly-owned subsidiary of the Company). Pursuant to the Mutual Agreement, the Exchanging Members agreed to deliver a block redemption notice in accordance with the Amended and Restated Limited Liability Company Agreement of New Fortress Intermediate LLC (the “NFI LLCA”) with respect to all of the NFI LLC Units, together with an equal number of Class B shares of the Company, that such Exchanging Members indirectly own as members of New Fortress Energy Holdings. Pursuant to the Mutual Agreement, the Company agreed to exercise the Call Right (as defined in the NFI LLCA), pursuant to which the Company would acquire such NFI LLC Units and such Class B shares in exchange for Class A shares of the Company (the “Exchange Transactions”). The Exchange Transactions were completed on June 10, 2020. In connection with the closing of the Exchange Transactions, the Company issued 144,342,572 Class A shares in exchange for an equal number of NFI LLC Units, together with an equal number of Class B shares of the Company. Following the completion of the Exchange Transactions, the Company owns all of the NFI LLC Units directly or indirectly and no Class B shares remain outstanding. As of June 30, 2020, NFE has 168,587,346 Class A shares outstanding.
Prior to the Exchange Transactions, the Company recognized the Exchanging Members’ economic interest in NFI as non-controlling interest in the Company’s condensed consolidated financial statements. Results of operations for the period prior to the date of the Exchange Transactions, June 10, 2020, was attributed to non-controlling interest based on the Exchanging Members’ interest in NFI; subsequent to the Exchange Transactions, results of operations, excluding results attributable to other investors in non-wholly owned subsidiaries, were recognized as net income or loss attributable to stockholders. Amounts that were attributable to these Exchanging Members' prior interest in NFI previously shown as non-controlling interest on the Company’s consolidated balance sheets have been reclassified to Class A shares.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include relative fair value allocation between revenue and lease components of contracts with customers, total consideration and fair value of identifiable net assets related to acquisitions and the fair value of equity awards granted to both employees and non-employees. Management evaluates its estimates and related assumptions regularly. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.
The Company may be involved in legal actions in the ordinary course of business, including governmental and administrative investigations, inquiries and proceedings concerning employment, labor, environmental and other claims. The Company will recognize a loss contingency in the condensed consolidated financial statements when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. The Company will disclose any loss contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred. Gain contingencies are not recorded until they are realized.
The Company’s contracts with customers may contain one or several performance obligations usually consisting of the sale of LNG, natural gas, and beginning in the first quarter of 2020, power and steam which are outputs from the Company’s natural gas-fueled infrastructure. The transaction price for each of these contracts is structured using similar inputs and factors regardless of the output delivered to the customer. The customers consume the benefit of the natural gas, power and steam when they are delivered by the Company to the customer’s power generation facilities or interconnection facility. Natural gas, power and steam qualify as a series with revenue being recognized over time using an output method, based on the quantity of natural gas, power, or steam that the customer has consumed. LNG is typically delivered in containers transported by truck to customer sites. Revenue from sales of LNG delivered by truck is recognized at the point in time at which physical possession and the risks and rewards of ownership transfer to the customer, either when the containers are shipped or delivered to the customers’ storage facilities, depending on the terms of the contract. Because the nature, timing and uncertainty of revenue and cash flows are substantially the same for LNG, natural gas, power and steam, the Company has presented Operating revenue on an aggregated basis.
The Company has concluded that variable consideration included in its agreements meets the exception for allocating variable consideration. As such, the variable consideration for these contracts is allocated to each distinct unit of LNG, natural gas, power or steam delivered and recognized when that distinct unit is delivered to the customer.
The Company’s contracts with customers to supply natural gas or LNG may contain a lease of equipment. The Company allocates consideration received from customers between lease and non-lease components based on the relative fair value of each component. The fair value of the lease component is estimated based on the estimated standalone selling price of the same or similar equipment leased to the customer. The Company estimates the fair value of the non-lease component by forecasting volumes and pricing of gas to be delivered to the customer over the lease term.
The leases of certain facilities and equipment to customers are accounted for as financing or operating leases. The current and non-current portion of financing leases are recorded within Prepaid expenses and other current assets and Finance leases, net on the condensed consolidated balance sheets, respectively. The lease payments for finance leases are segregated into principal and interest components similar to a loan. Interest income is recognized on an effective interest method over the lease term and included in Other revenue in the condensed consolidated statements of operations and comprehensive loss. The principal component of the lease payment is reflected as a reduction to the net investment in the lease. For the Company’s operating leases, the amount allocated to the leasing component is recognized over the lease term as Other revenue in the condensed consolidated statements of operations and comprehensive loss.
In addition to the revenue recognized from the leasing components of agreements with customers, Other revenue includes revenue recognized from the construction, installation and commissioning of equipment, inclusive of natural gas used in the commissioning process, to transform customers’ facilities to operate utilizing natural gas or to allow customers to receive power or other outputs from our natural gas-fueled power generation facilities. Revenue from these development services is recognized over time as the Company transfers control of the asset to the customer or based on the quantity of natural gas consumed as part of commissioning the customer’s facilities. If the customer is not able to obtain control over the asset under construction until such services are completed, revenue is recognized when the services are completed and the customer has control of the infrastructure. Such agreements may also include a significant financing component, and the Company recognizes revenue for the interest income component over the term of the financing as Other revenue.
Shipping and handling costs are not considered to be separate performance obligations. These costs are recognized in the period in which the costs are incurred and presented within Cost of sales in the condensed consolidated statements of operations and comprehensive loss. All such shipping and handling activities are performed prior to the customer obtaining control of the LNG or natural gas.
The Company collects sales taxes from its customers based on sales of taxable products and remits such collections to the appropriate taxing authority. The Company has elected to present sales tax collections in the condensed consolidated statements of operations and comprehensive loss on a net basis and, accordingly, such taxes are excluded from reported revenues.
The Company elected the practical expedient under which the Company does not adjust consideration for the effects of a significant financing component for those contracts where the Company expects at contract inception that the period between transferring goods to the customer and receiving payment from the customer will be one year or less.
The Company has long-term supply agreements to purchase LNG, and the Company may incur termination charges to the extent that the Company cancels such contractual arrangements. Further, if the Company is unable to take physical possession of a portion of the contracted quantity of LNG due to capacity limitations, the supplier will attempt to sell the undelivered quantity through a mitigation sale. The Company may incur a loss on a mitigation sale if the cargo is unable to be sold for a price greater than the contracted price. These costs are included in a separate line in the condensed consolidated statements of operations and comprehensive loss because such costs are not related to inventory delivered to the Company’s customers.
During the three and six months ended June 30, 2020, the Company recognized a termination charge of $105,000 associated with an agreement with one of the Company’s LNG suppliers to terminate the obligation to purchase any LNG from this supplier for the remainder of 2020 in exchange for a cancellation fee of $105,000. Loss on mitigation sales of $18,906 and $19,114 were recognized in the three and six months ended June 30, 2020, respectively.
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Adoption of new and revised standards |
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Jun. 30, 2020 | |||||||
| Adoption of new and revised standards [Abstract] | |||||||
| Adoption of new and revised standards |
As an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Disclosure Framework – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires financial assets measured at amortized cost basis, including trade receivables, to be presented net of the amount expected to be collected. The measurement of all expected credit losses will be based on historical experience, current conditions, and reasonable and supportable forecasts. In October 2019, the FASB voted to approve a proposal to defer the effective date of ASC 2016-13 for certain entities, including emerging growth companies that take advantage of the extended transition period, to fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements and timing of adoption.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, including removing certain exceptions related to the general principles in ASU 740, Income Taxes. It also clarifies and simplifies other aspects of the accounting for income taxes. The new standard is effective for interim and annual periods beginning after December 15, 2021, and early adoption is permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements and timing of adoption.
On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (“ASC 842”), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheet and making targeted changes to lessor accounting. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on the lease’s classification as a finance or operating lease. However, unlike ASC 840, which required only capital leases to be recognized on the balance sheet, ASC 842 requires most leases to be recognized on the balance sheet as a right-of-use (“ROU”) asset and a lease liability.
The Company has entered into lease agreements for the use of LNG vessels, marine port space, office space, land and equipment, all of which are operating leases. ROU assets recognized for these leases represent the Company’s right to use an underlying asset for the lease term, and the lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. The incremental borrowing rate used to calculate the present value of lease payments is determined using existing credit rates of unsecured borrowings adjusted for collateral, which are then adjusted for the appropriate lease term and currency.
The Company adopted ASC 842 effective January 1, 2020 and elected to apply the modified retrospective transition method at the beginning of the period of adoption, which allowed the Company to begin recognizing and measuring leases under ASC 842 at January 1, 2020, without modifying the comparative period financial statements. Upon adoption of ASC 842, the Company recorded ROU assets and corresponding lease liabilities of $124,774 and $103,874, respectively.
The Company did not elect the package of practical expedients and therefore, as part of transition, the Company reassessed the previous conclusions made under ASC 840 related to the identification of leases, classification of leases and initial direct costs based on the standards of ASC 842. In connection with the reassessment of previous conclusions, the Company determined that the direct financing lease recognized related to the Montego Bay Terminal is no longer a lease under ASC 842. The Company recognized a transition adjustment that removed the unamortized net investment in the direct financing lease and recognized the underlying assets as Property, plant and equipment net of depreciation that would have been recognized since the commissioning of the Montego Bay Terminal, with the difference of approximately $9,085, net of taxes of $2,945, recorded as an adjustment to retained earnings. Beginning in 2020, the Company will recognize payments previously allocated to the leasing component of the gas sales agreement with this customer within Operating revenue in the condensed consolidated statements of operations and comprehensive loss. Under ASC 840, amounts allocated to the leasing component had been recognized on an effective interest method over the lease term with only the portion representing interest income recognized as Other revenue.
The Company made an accounting policy election to exclude leases with terms of 12 months or less from ROU assets and lease liabilities on the balance sheet, and short-term lease payments are recognized on a straight-line basis over the lease term. Variable payments under short-term leases are recognized in the period in which the obligation that triggers the variable payment becomes probable. The Company, as lessee, has also elected the practical expedient not to separate lease and non-lease components for marine port space, office space, land and equipment leases. The Company will separate the lease and non-lease components for LNG vessel leases. The allocation of lease payments between lease and non-lease components has been determined based on the relative fair value of each component. The fair value of the lease component is estimated based on the estimated standalone price to lease a bareboat LNG vessel. The fair value of the non-lease component is estimated based on the estimated standalone price of operating the respective vessel, inclusive of the costs of the crew and other operating costs.
The Company, as lessor, will continue to separate lease and non-lease components for the equipment leases provided in connection with agreements for the sale of LNG or natural gas to customers.
The Company has elected the land easement practical expedient, which allows the Company to continue to account for pre-existing land easements as intangible assets under the accounting policy that existed before adoption of ASC 842.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which provides additional guidance to improve the effectiveness of disclosure requirements on fair value measurement. The Company has adopted ASU 2018-13 for the year beginning January 1, 2020. As this guidance is only related to qualitative financial disclosures, it did not have a material impact on the Company’s condensed consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets. A customer’s accounting for the costs of the hosting component of the arrangement is not affected by the new guidance. The Company has early adopted ASU 2018-15 for the year beginning January 1, 2020, using the prospective transition approach. This approach did not require any adjustment to comparative financial statements. The Company did not capitalize a material amount of implementation costs as a result of adopting this guidance in the three or six months ended June 30, 2020, and the adoption did not result in material impact on the Company’s condensed consolidated financial statements.
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Revenue from contracts with customers |
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| Revenue from contracts with customers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from contracts with customers |
Under most customer contracts, invoicing occurs once the Company’s performance obligations have been satisfied, at which point payment is unconditional. As of June 30, 2020 and December 31, 2019, receivables related to revenue from contracts with customers totaled $44,704 and $30,563, respectively, and were included in “Receivables, net” on the condensed consolidated balance sheets, net of the allowance for doubtful accounts. Other items included in Receivables, net not related to revenue from contracts with customers represent receivables associated with reimbursable costs, recoverable taxes and leases which are accounted for outside the scope of ASC 606.
The Company has recognized a contract liability, comprised of unconditional payments due or paid under the contract with a customer prior to the Company’s satisfaction of the related performance obligations. The performance obligations are expected to be satisfied during the next 12 months, and the contract liability is classified within Other current liabilities on the condensed consolidated balance sheets. Contract assets are comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent periods. The contract liability and contract assets balances as of June 30, 2020 and December 31, 2019 are detailed below:
As of June 30, 2020, the Company has unbilled receivables of $6,999, of which $356 is presented within Other current assets and $6,643 is presented within Other non-current assets on the condensed consolidated balance sheet. These unbilled receivables represent unconditional right to payment subject only to the passage of time.
Operating revenue which includes revenue from sales of LNG and natural gas as well as outputs from the Company’s natural gas-fired power generation facilities, including power and steam, was $76,177 and $31,738 for the three months ended June 30, 2020 and 2019, respectively. Operating revenue was $139,679 and $57,876 for the six months ended June 30, 2020 and 2019, respectively. During March 2020, the Company began to deliver power and steam recognizing $6,946 and $8,677 in operating revenue for the three and six months ended June 30, 2020, respectively. Other revenue includes revenue for development services as well as lease and other revenue. The table below summarizes the balances in Other revenue:
Transaction price allocated to remaining performance obligations
Some of the Company’s contracts are short-term in nature with a contract term of less than a year. The Company applied the optional exemption not to report any unfulfilled performance obligations related to these contracts.
The Company has arrangements in which LNG, natural gas or outputs from the Company’s power generation facilities are sold on a “take-or-pay” basis whereby the customer is obligated to pay for the minimum guaranteed volumes even if it does not take delivery of them. The price under these agreements is typically based on a market index plus a fixed margin. The fixed transaction price allocated to the remaining performance obligations under these arrangements is $4,410,159 as of June 30, 2020, representing the fixed margin multiplied by the outstanding minimum guaranteed volumes. The Company expects to recognize this revenue over the following time periods. The pattern of recognition reflects the minimum guaranteed volumes in each period:
For all other sales contracts that have a term exceeding one year, the Company has elected the practical expedient in ASC 606 under which the Company does not disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. For these excluded contracts, the sources of variability are (a) the fluctuating market index prices of natural gas used to price the contracts, and (b) the variation in volumes that may be delivered to the customer. Both sources of variability are expected to be resolved at or shortly before delivery of each unit of LNG, natural gas, power or steam. As each unit of LNG, natural gas, power or steam represents a separate performance obligation, future volumes are wholly unsatisfied.
The Company has recognized costs to fulfill a contract with a significant customer, which primarily consist of expenses required to enhance resources to deliver under the agreement with the customer. As of June 30, 2020, the Company has capitalized $10,031, of which $498 of these costs is presented within Other current assets and $9,533 is presented within Other non-current assets on the condensed consolidated balance sheets. As of December 31, 2019, the Company had capitalized $8,839, of which $331 of these costs was presented within Other current assets and $8,508 was presented within Other non-current assets on the condensed consolidated balance sheets. In the first quarter of 2020, the Company began to delivery under the agreement and started recognizing these costs on a straight-line basis over the expected term of the agreement.
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Leases |
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases |
Lessee
The Company has operating leases primarily for the use of LNG vessels, marine port space, office space, land and equipment under non-cancellable lease agreements. The Company’s leases may include multiple optional renewal periods that are exercisable solely at the Company’s discretion. Renewal periods are included in the lease term when the Company is reasonably certain that the renewal options would be exercised, and the associated lease payments for such periods are reflected in the ROU asset and lease liability.
The Company’s leases include fixed lease payments which may include escalation terms based on a fixed percentage or may vary based on an inflation indexes or other market adjustments. Escalations based on changes in inflation indices and market adjustments and other lease costs that vary based on the use of the underlying asset are not included as lease payments in the calculation of the lease liability or ROU asset and are included in variable lease cost when the obligation that triggers the variable payment becomes probable. Variable lease cost includes contingent rent payments for office space based on the percentage occupied by the Company in addition to common area charges and other charges that are variable in nature. The Company also has a component of lease payments that are variable related to the LNG vessels, in which the Company may receive credits based on the performance of the LNG vessels during the period.
For the three months and six months ended June 30, 2020, the Company’s operating lease cost recorded within the condensed consolidated statements of operations and comprehensive loss were as follows:
Capitalized lease cost relates to operating lease cost for vessels and port space used during the commissioning of development projects. Short-term lease costs for vessels chartered by the Company to bring inventory from a supplier’s facilities to the Company’s storage locations are capitalized to inventory.
Cash paid for operating leases is reported in operating activities in the condensed consolidated statements of cash flows. Supplemental cash flow information related to leases was as follows for the six months ended June 30, 2020:
The future payments due under operating leases as of June 30, 2020 is as follows:
As of June 30, 2020, the weighted-average remaining lease term for all operating leases was 5.8 years. Because the Company generally does not have access to the rate implicit in the lease, the incremental borrowing rate is utilized as the discount rate. The weighted average discount rate associated with operating leases as of June 30, 2020 was 8.6%.
The Company has entered into an LNG vessel lease that has not commenced as of June 30, 2020 with a noncancelable term of 5 years and includes fixed payments for lease and non-lease components of $69,704.
Future annual minimum lease payments for operating leases as of December 31, 2019, prepared in accordance with accounting standards prior to the adoption of ASC 842, were as follows:
During the three and six months ended June 30, 2019, the Company recognized rental expense for all operating leases of $8,939 and $17,376, respectively, related primarily to LNG vessel time charters, office space, a land site lease and marine port berth leases.
Lessor
In the Company’s agreements to sell LNG or natural gas to customers, the Company may also lease certain equipment to customers which are accounted for either as a finance or an operating lease. Property, plant and equipment subject to operating leases is included within ISO containers and other equipment within Note 12. Property, plant and equipment, net.
The following table shows the expected future lease payments as of June 30, 2020, for the remainder of 2020 through 2024 and thereafter:
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Fair value |
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| Fair value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value |
Fair value measurements and disclosures require the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:
The valuation techniques that may be used to measure fair value are as follows:
The following table presents the Company’s financial assets and financial liabilities that are measured at fair value as of June 30, 2020 and December 31, 2019:
The Company estimates fair value of the derivative liability and equity agreement using a discounted cash flows method with discount rates based on the average yield curve for bonds with similar credit ratings and matching terms to the discount periods as well as a probability of the contingent event occurring. The table below summarizes the fair value adjustment, recorded within Other expense (income), net in the condensed consolidated statements of operations and comprehensive loss, and currency translation adjustment, recorded within the Other comprehensive loss, for the three and six months ended June 30, 2020 and 2019:
During the three and six months ended June 30, 2020 and 2019, the Company had no settlements of the equity agreement or derivative liability or any transfers in or out of Level 3 in the fair value hierarchy.
The liability associated with the equity agreement of $16,678 and $16,800 as of June 30, 2020 and December 31, 2019, respectively, is recorded within Other current liabilities on the condensed consolidated balance sheets. The liability associated with the derivative liability of $9,686 and $9,800 as of June 30, 2020 and December 31, 2019, respectively, is recorded within Other long-term liabilities on the condensed consolidated balance sheets.
The Company estimates fair value of outstanding debt using a discounted cash flow method based on current market interest rates for debt issuances with similar remaining years to maturity and adjusted for credit risk. The Company has estimated that the carrying value for each of the Credit Agreement, Senior Secured Bonds, and Senior Unsecured Bonds (all defined below in “Note 16. Debt”) approximate fair value. The fair value estimate is classified as Level 3 in the fair value hierarchy.
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Restricted cash |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted cash [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted cash |
As of June 30, 2020 and December 31, 2019, restricted cash consisted of the following:
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Inventory |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory |
As of June 30, 2020 and December 31, 2019, inventory consisted of the following:
Inventory is adjusted to the lower of cost or net realizable value each quarter. Changes in the value of inventory are recorded within Cost of sales in the condensed consolidated statements of operations and comprehensive loss. No adjustments were recorded during the three and six months ended June 30, 2020 and 2019.
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Prepaid expenses and other current assets |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid expenses and other current assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid expenses and other current assets |
As of June 30, 2020 and December 31, 2019, prepaid expenses and other current assets consisted of the following:
Other current assets as of June 30, 2020 and December 31, 2019 primarily consists of receivables for recoverable taxes and capitalized costs associated with delivering development services to a customer.
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Investment in equity securities |
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Jun. 30, 2020 | |||
| Investment in equity securities [Abstract] | |||
| Investment in equity securities |
The Company has invested in equity securities of an international oil and gas drilling contractor. The cost of the investment was $3,667. As of June 30, 2020 and December 31, 2019, the Company owned 295,256 shares of that contractor and the fair value of the investment was $323 and $2,540, respectively.
The unrealized (gain) loss of $(183) and $1,698 for the three months ended June 30, 2020 and 2019, respectively, and $2,217 and $802 for the six months ended June 30, 2020 and 2019, respectively, is included within Other expense (income), net in the condensed consolidated statements of operations and comprehensive loss.
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Construction in progress |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||
| Construction in Progress [Abstract] | ||||||||||||||||||||||||||||
| Construction in progress |
The Company’s construction in progress activity during the six months ended June 30, 2020 is detailed below:
Interest expense of $17,902 and $9,111, inclusive of amortized debt issuance costs, was capitalized for the six months ended June 30, 2020 and 2019, respectively.
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Property, plant and equipment, net |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, plant and equipment, net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, plant and equipment, net |
As of June 30, 2020 and December 31, 2019, the Company’s property, plant and equipment, net consisted of the following:
In connection with the adoption of ASC 842, the Company determined that the direct financing lease recognized related to the Montego Bay Terminal is no longer a lease under ASC 842. As of January 1, 2020, the Company recognized a transition adjustment that removed the unamortized net investment in the direct financing lease of $91,005 and recognized the underlying assets as Property, plant and equipment of $92,207 and accumulated depreciation of $13,932 that would have been recognized since the commissioning of the Montego Bay Terminal, with the difference of approximately $9,085, net of taxes of $2,945, recorded as an adjustment to retained earnings.
Depreciation for the three months ended June 30, 2020 and 2019 totaled $7,539 and $1,983, respectively, of which $223 and $147 is respectively included within Cost of sales in the condensed consolidated statements of operations and comprehensive loss. Depreciation for the six months ended June 30, 2020 and 2019 totaled $12,750 and $3,563, respectively, of which $450 and $305 is respectively included within Cost of sales in the condensed consolidated statements of operations and comprehensive loss.
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Intangible assets |
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| Intangible assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible assets |
The following table summarizes the composition of intangible assets as of June 30, 2020 and December 31, 2019:
As of June 30, 2020 and December 31, 2019, the weighted-average remaining amortization periods for the intangible assets was 38.0 years and 38.8 years, respectively. As of January 1, 2020, intangible assets associated with favorable lease terms in acquired leases have been reclassified as a ROU assets as a result of adoption of ASC 842.
Amortization for the three months ended June 30, 2020 and 2019 totaled $282 and $286, respectively. Amortization was $552 and $564 for the six months ended June 30, 2020 and 2019, respectively.
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Other non-current assets |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-current assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-current assets |
As of June 30, 2020 and December 31, 2019, Other non-current assets consisted of the following:
Nonrefundable deposits are primarily related to deposits for planned land purchases in Pennsylvania and Ireland.
Upfront payments to customers consist of amounts the Company has paid in relation to two natural gas sales contracts with customers to construct fuel-delivery infrastructure that the customers will own.
As of January 1, 2020, port access rights related to the Company’s port lease in Baja California Sur, Mexico, and payments to incumbent tenants to secure the Company’s port lease in San Juan, Puerto Rico were reclassified as ROU assets in connection with the adoption of ASC 842.
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Accrued liabilities |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued liabilities |
As of June 30, 2020 and December 31, 2019, accrued liabilities consisted of the following:
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Debt |
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| Debt [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt |
As of June 30, 2020 and December 31, 2019, debt consisted of the following:
The Credit Agreement
On January 10, 2020, the Company entered into a credit agreement to borrow $800,000 in term loans (the “Credit Agreement”). The Credit Agreement will mature in with the full principal balance due upon maturity. Interest is payable quarterly and is based on a LIBOR rate divided by one minus the applicable reserve requirement, subject to a floor of 1.50%, plus a margin of 6.25%. The interest rate margin increases each year of the term by 1.50%. A portion of the proceeds received were utilized to extinguish the Term Loan Facility (defined below), including outstanding principal of $495,000.
The Credit Agreement is secured by mortgages on certain properties owned by the Company’s subsidiaries, in addition to other collateral. The Company is required to comply with certain financial covenants and other restricted covenants customary for credit agreement of this type, including restrictions on indebtedness, liens, acquisitions and investments, restricted payments and dispositions. The Credit Agreement also provides for customary events of default, prepayment and cure provisions.
In connection with obtaining the Credit Agreement and the extinguishment of the Term Loan Facility, the Company incurred $36,313 in origination, structuring, and other fees which were recognized as a reduction of the principal balance of the Credit Agreement on the condensed consolidated balance sheets. As of June 30, 2020, the remaining unamortized deferred financing costs were $26,105.
Term Loan Facility
On August 16, 2018, the Company entered into a credit agreement with a syndicate of two lenders to borrow up to an aggregate principal amount of $240,000, and proceeds received from this credit agreement were utilized to repay prior debt facilities. On December 31, 2018, the Company amended this credit agreement to increase the available borrowing principal amount to $500,000 (as amended, the “Term Loan Facility”), and as of December 31, 2018, the Company had an outstanding principal balance of $280,000 under the Term Loan Facility. On March 21, 2019, the Company drew an additional $220,000, bringing the Company’s total outstanding borrowings to $500,000 under the Term Loan Facility.
All borrowings under the Term Loan Facility bore interest at a rate selected by the Company of either (i) LIBOR divided by one minus the applicable reserve requirement plus a spread of 4% or (ii) subject to a floor of 1%, a Base Rate equal to the higher of (a) the Prime Rate, (b) the Federal Funds Rate plus % or (c) the 1-month LIBOR rate plus 1.00% plus a spread of 3.0%. The Term Loan Facility was repayable in quarterly installments of $1,250 with a balloon payment due at maturity.
The Term Loan Facility was secured by mortgages on certain properties owned by the Company’s subsidiaries, in addition to other collateral. The Term Loan Facility was amended in the third quarter of 2019 to allow certain properties of a consolidated subsidiary to secure the Senior Secured Bonds (defined below).
The Company incurred costs in connection with obtaining the Term Loan Facility, the extinguishment of the Company’s prior debt facilities, and the amendment of the Term Loan Facility. Some of the costs incurred were capitalized as a reduction to the Term Loan Facility on the consolidated balance sheets, and all deferred financing costs associated with the Term Loan Facility were amortized over the term of the Term Loan Facility, through December 31, 2019. As such, there were no unamortized deferred financing costs as of December 31, 2019.
The Term Loan Facility had a maturity date of December 31, 2019 with an option to extend the maturity date for two additional six-month periods. Upon the exercise of each extension option, the Company would pay a fee equal to 1.0% of the outstanding principal balance at the time of the exercise and the spread on LIBOR and Base Rate would increase by 0.5%. On December 30, 2019, the Company entered into an amendment with the lenders to extend the maturity to January 21, 2020; no fees were due to lenders from the execution of this amendment. On January 15, 2020, the Company repaid the full amount outstanding including fees due to the lenders using proceeds from the Credit Agreement to extinguish the Term Loan Facility. In conjunction with the extinguishment of the Term Loan Facility, the Company recognized a Loss on extinguishment of debt of $9,557 in the condensed consolidated statements of operations and comprehensive loss.
South Power Bonds
On September 2, 2019, NFE South Power Holdings Limited (“South Power”), a consolidated subsidiary of the Company, entered into a facility for the issuance of secured and unsecured bonds (the “Senior Secured Bonds” and “Senior Unsecured Bonds”, respectively) and subsequently issued $73,317 and $43,683 in Senior Secured Bonds and Senior Unsecured Bonds, respectively. The Senior Secured Bonds are secured by the dual-fired combined heat and power facility in Clarendon, Jamaica (the “CHP Plant”) and related receivables and assets, and the proceeds were used to fund the completion of the CHP Plant and to reimburse shareholder advances. Upon completion of construction of the CHP Plant in the fourth quarter of 2019, South Power issued an additional $63,000 in Senior Secured Bonds. The Company received $10,856 of the proceeds in 2019 and received the remaining proceeds of $52,144 in January 2020.
The Senior Secured Bonds bear interest at an annual fixed rate of 8.25% and will mature 15 years from the closing date of each issuance. No principal payments will be due for the first seven years. After seven years, quarterly principal payments of approximately 1.6% of the original principal amount will be due, with a 50% balloon payment due upon maturity. Interest payments on outstanding principal balances are due quarterly.
The Senior Unsecured Bonds bear interest at an annual fixed rate of 11.00% and will mature in . No principal payments will be due for the first nine years. Beginning in 2028, principal payments will be due quarterly on an escalating schedule. Interest payments on outstanding principal balances are due quarterly.
South Power will be required to comply with certain financial covenants as well as customary affirmative and negative covenants, including limitations on incurring additional indebtedness. The facility also provides for customary events of default, prepayment and cure provisions.
The Company paid approximately $3,892 of fees in connection with the issuance of Senior Secured Bonds and Senior Unsecured Bonds. These fees were capitalized on a pro-rata basis as a reduction of the Senior Secured Bonds and Senior Unsecured Bonds on the condensed consolidated balance sheets. The total unamortized deferred financing costs as of June 30, 2020 and December 31, 2019 was $3,657 and $3,799, respectively.
Under the terms of the facility, South Power is required to maintain a Debt Service Reserve Account (as defined in the facility) in the amount of $8,131. Such amount is included as a component of Restricted cash on the Company’s condensed consolidated balance sheets (see Note 7).
Interest Expense
Interest and related amortization of debt issuance costs recognized during major development and construction projects are capitalized and included in the cost of the project. Interest expense, net of amounts capitalized, recognized for the three and six months ended June 30, 2020 and 2019 consisted of the following:
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Income taxes |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2020 | |||
| Income taxes [Abstract] | |||
| Income taxes |
In connection with the IPO, NFE contributed the net proceeds from the IPO to NFI in exchange for NFI LLC Units, and NFE became the managing member of NFI. NFI is a limited liability company that is treated as a partnership for U.S. federal income tax purposes and for most applicable state and local income tax purposes. As a partnership, NFI is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by NFI is passed through to and included in the taxable income or loss of its members, including NFE, on a pro rata basis, subject to applicable tax regulations. NFE is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of NFI. Additionally, NFI and its subsidiaries are subject to income taxes in the various foreign jurisdictions in which they operate.
In connection with the IPO, NFE recorded a deferred tax asset of $42,783 related to the difference between its tax basis in its investment in NFI and NFE’s share of the financial statement carrying amount of the net assets of NFI. The deferred tax asset was recorded to equity and is fully offset by a valuation allowance also recorded to equity.
Subsequent to the Exchange Transactions completed on June 10, 2020, 100% of NFI’s operations will be included in the NFE income tax provision; there is no impact on income tax expense expected due to the Exchange Transactions.
The effective tax rate for the three months ended June 30, 2020 was (0.07)%, compared to (0.30)% for the three months ended June 30, 2019. The total tax expense for the three months ended June 30, 2020 was $117, compared to $155 for the three months ended June 30, 2019.
The effective tax rate for the six months ended June 30, 2020 was (0.05)%, compared to (0.36)% for the six months ended June 30, 2019. The total tax expense for the six months ended June 30, 2020 was $113, compared to $401 for the six months ended June 30, 2019.
The primary items which decreased the Company’s effective tax rate for the three months and six months ended June 30, 2020 and June 30, 2019 from the U.S. federal statutory rate of 21% were valuation allowances recorded against the Company’s current period losses and earnings generated in Non-U.S. jurisdictions with preferential tax rates.
The Company has not recorded a liability for uncertain tax positions as of June 30, 2020. The Company remains subject to periodic audits and reviews by the taxing authorities, and NFE’s returns since its formation remain open for examination.
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Commitments and contingencies |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2020 | |||
| Commitments and contingencies [Abstract] | |||
| Commitments and contingencies |
The Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. The Company does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the Company's financial position, results of operations or cash flows.
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Earnings per share |
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| Earnings per share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per share |
In connection with the IPO, New Fortress Energy Holdings, the Company’s predecessor, effected a one-for-2.16 stock split of its issued and outstanding common shares, resulting in 147,058,824 common shares. Upon the reorganization, New Fortress Energy Holdings obtained the same number of Class B shares in NFE. In connection with the closing of the Exchange Transactions on June 10, 2020, all outstanding Class B shares were exchanged for Class A shares. The weighted average shares outstanding are significantly lower than the Class A shares outstanding on June 30, 2020 due to the timing of the Exchange Transactions.
The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the periods presented because its effects would have been anti-dilutive.
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Share-based compensation |
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| Share-based compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation |
In connection with the IPO, the Company adopted the New Fortress Energy LLC 2019 Omnibus Incentive Plan (the “Incentive Plan”), effective as of February 4, 2019. Under the Incentive Plan, the Company may issue options, share appreciation rights, restricted shares, restricted share units (“RSUs”), share bonuses or other share-based awards to selected officers, employees, non-employee directors and select non-employees of NFE or its affiliates.
RSUs
The Company has granted RSUs to select officers, employees, non-employee members of the board of directors and select non-employees under the Incentive Plan. The fair value of RSUs on the grant date is estimated based on the closing price of the underlying shares on the grant date and other fair value adjustments to account for a post-vesting holding period. These fair value adjustments were estimated based on the Finnerty model.
The following table summarizes the RSU activity for the six months ended June 30, 2020:
The following table summarizes the share-based compensation expense for the Company’s RSUs recorded for the three and six months ended June 30, 2020 and 2019:
For the three months ended June 30, 2020 and 2019, cumulative compensation expense recognized for forfeited RSU awards of $488 and $0, respectively, was reversed. For the six months ended June 30, 2020 and 2019, cumulative compensation expense recognized for forfeited RSU awards of $549 and $0, respectively, was reversed. The Company recognizes the income tax benefits resulting from vesting of RSUs in the period of vesting, to the extent the compensation expense has been recognized.
As of June 30, 2020, the Company had 1,627,673 non-vested RSUs subject to service conditions and had unrecognized compensation costs of approximately $13,515. The non-vested RSUs will vest over a period from ten months to three years following the grant date. The weighted-average remaining vesting period of non-vested RSUs totaled 1.75 years as of June 30, 2020.
Performance Share Units (“PSUs”)
During the first quarter of 2020, the Company granted 1,109,777 PSUs to certain employees and non-employees. The PSUs contain a performance condition, and vesting will be determined based on achievement of a performance metric for the year ended December 31, 2021. The number of shares that will vest can range from zero to 2,219,554. For the three and six months ended June 30, 2020, the Company determined that it was not probable that the performance condition required for any of the PSUs to vest would be achieved, and as such, no compensation expense has been recognized in the condensed consolidated statements of operations and comprehensive loss. Unrecognized compensation costs if the maximum amount of shares were to vest based on the achievement of the performance condition was $32,073, and the weighted-average remaining vesting period of non-vested PSUs totaled 1.50 years as of June 30, 2020.
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Related party transactions |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||
| Related party transactions [Abstract] | ||||||||||||||||||||||||||||||
| Related party transactions |
Management services
The Company is majority owned by Messrs. Edens (our chief executive officer and chairman of our Board of Directors) and Nardone (one of our Directors) who are currently employed by Fortress Investment Group LLC (“Fortress”). In the ordinary course of business, Fortress, through affiliated entities, has historically charged the Company for administrative and general expenses incurred pursuant to its Management Services Agreement (“Management Agreement”). Upon completion of the IPO, the Management Agreement was terminated and replaced by an Administrative Services Agreement (“Administrative Agreement”) to charge the Company for similar administrative and general expenses. The charges under the Management Agreement and Administrative Agreement that are attributable to the Company totaled $1,914 and $1,742 for the three months ended June 30, 2020 and 2019, respectively, and $4,145 and $4,520 for the six months ended June 30, 2020 and 2019, respectively. Costs associated with the Management Agreement and Administrative Agreement are included within Selling, general and administrative in the condensed consolidated statements of operations and comprehensive loss. As of June 30, 2020 and December 31, 2019, $3,465 and $5,083 were due to Fortress, respectively.
In addition to management and administrative services, an affiliate of Fortress owns and leases an aircraft chartered by the Company for business purposes in the course of operations. The Company incurred, at aircraft operator market rates, charter costs of $45 and $649 for the three months ended June 30, 2020 and 2019, respectively, and $1,284 and $1,625 for the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020 and December 31, 2019, $1,974 and $4,286 was due to this affiliate, respectively.
Land and office lease
The Company has leased land and office space from Florida East Coast Industries, LLC (“FECI”), which is controlled by funds managed by an affiliate of Fortress. In April 2019, FECI sold the office building to a non-affiliate, and as such, the lease of the office space is no longer held with a related party. The Company recognized expense related to the land lease still held by a related party during the three and six months ended June 30, 2020 of $103 and $206, respectively, which was included within Operations and maintenance in the condensed consolidated statements of operations and comprehensive loss. The expense for the period that the land and building was owned by a related party during the three months ended June 30, 2019 totaled $112, of which $38 related to the office lease and ancillary services is included in Selling, general and administrative, and $74 related to the land lease is included within Operations and maintenance. The expense for the period that the land and building was owned by a related party during the six months ended June 30, 2019 totaled $758 of which $386 was capitalized to Construction in progress, $223 related to the office lease and ancillary services is included in Selling, general and administrative, and $149 related to the land lease is included within Operations and maintenance, respectively in the condensed consolidated statements of operations and comprehensive loss. As of June 30, 2020 and December 31, 2019, there was no amount due to FECI.
DevTech Investment
In August 2018, the Company entered into a consulting arrangement with DevTech Environment Limited (“DevTech”) to provide business development services to increase the customer base of the Company. DevTech also contributed cash consideration in exchange for a 10% interest in a consolidated subsidiary. The 10% interest is reflected as non-controlling interest in the Company’s condensed consolidated financial statements. DevTech purchased 10% of a note payable due to an affiliate of the Company. As of June 30, 2020 and December 31, 2019, $715 and $815 was owed to DevTech on the note payable, respectively. The outstanding note payable due to DevTech is included in Other long-term liabilities on the condensed consolidated balance sheets as of June 30, 2020. The interest expense on the note payable due to DevTech was $19 and $24 for the three months ended June 30, 2020 and 2019, respectively, and $38 and $46 for the six months ended June 30, 2020 and 2019, respectively. No interest has been paid, and accrued interest has been recognized within Accrued expenses on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, $343 and $443 was due from DevTech, respectively.
Fortress affiliated entities
Since 2017, the Company has provided certain administrative services to related parties including Fortress affiliated entities. As of June 30, 2020 and December 31, 2019, $1,117 and $1,134 were due from affiliates, respectively. There are no costs incurred by the Company as the Company is fully reimbursed for all costs incurred.
Additionally, an entity formerly affiliated with Fortress and currently owned by Messrs. Edens and Nardone provides certain administrative services to the Company, as well as providing office space under a month-to-month non-exclusive license agreement. The Company incurred rent and administrative expenses of approximately $0 and $607 for the three months ended June 30, 2020 and 2019, respectively, and $849 and $1,026 for the six months ended June 30, 2020 and 2019, respectively. No amounts were incurred in the three months ended June 30, 2020 due to credits received from this affiliate for previously performed services. As of June 30, 2020 and December 31, 2019, $1,147 and $883 were due to this entity, respectively.
Due to/from Affiliates
The table below summarizes the balances outstanding with affiliates at June 30, 2020 and December 31, 2019:
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Subsequent events |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2020 | |||
| Subsequent events [Abstract] | |||
| Subsequent events |
On August 3, 2020, the Company announced the decision to complete the final step in simplifying the Company’s corporate structure by converting New Fortress Energy LLC from a Delaware limited liability company to a Delaware corporation named New Fortress Energy Inc. (the “Conversion”). Since its IPO, NFE has been a corporation for U.S. tax purposes, so converting NFE from a limited liability company to a corporation has no effect on the U.S. tax treatment of the Company or its shareholders. The Conversion is expected to become effective on August 7, 2020. The Conversion was approved by NFE’s board of directors, following receipt of special approval of the Conversion pursuant to NFE’s First Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”). Under Section 10.3(d) of our LLC Agreement, no vote of the members is required or will be sought for the Conversion.
Upon the Conversion, each Class A share, representing Class A limited liability company interests of the Company (“Class A Common Shares”), outstanding immediately prior to the Conversion will be converted into one issued and outstanding, fully paid and nonassessable share of Class A common stock, $0.01 par value per share, of the Corporation (“Class A Common Stock”). Class A Common Shares currently shown on the Company’s condensed consolidated statements of changes in stockholders’ equity will be reclassified to Class A Common Stock and Additional paid-in capital with no change to Total stockholders’ equity.
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Significant accounting policies (Policies) |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2020 | |||
| Significant accounting policies [Abstract] | |||
| Basis of presentation and principles of consolidation |
The accompanying unaudited interim condensed consolidated financial statements contained herein were prepared in accordance with GAAP and reflect all normal and recurring adjustments which are, in the opinion of management, necessary to provide a fair statement of the financial position, results of operations and cash flows of the Company for the interim periods presented. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned consolidated subsidiaries. The ownership interest of other investors in consolidated subsidiaries is recorded as a non-controlling interest. All significant intercompany transactions and balances have been eliminated on consolidation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2019.
On February 4, 2019, the Company completed an initial public offering (“IPO”) and a series of other transactions, in which the Company issued and sold 20,000,000 Class A shares at an IPO price of $14.00 per share. The Company’s Class A shares began trading on NASDAQ Global Select Market (“NASDAQ”) under the symbol “NFE” on January 31, 2019. Net proceeds from the IPO were $257.0 million, after deducting underwriting discounts and commissions and transaction costs. These proceeds were contributed to New Fortress Intermediate LLC (“NFI”), an entity formed in conjunction with the IPO, in exchange for 20,000,000 limited liability company units in NFI (“NFI LLC Units”). In addition, New Fortress Energy Holdings contributed all of its interests in consolidated subsidiaries that comprised substantially all of its historical operations to NFI in exchange for NFI LLC Units. In connection with the IPO, New Fortress Energy Holdings also received 147,058,824 Class B shares of the Company, which is equal to the number of NFI LLC Units held by New Fortress Energy Holdings immediately following the IPO. New Fortress Energy Holdings retained a significant interest in NFE through its ownership of 147,058,824 Class B shares, representing a 88.0% voting and non-economic interest. New Fortress Energy Holdings also had an 88.0% economic interest in NFI through its ownership of 147,058,824 of NFI LLC Units. New Fortress Energy Holdings has been determined to be NFE’s predecessor for accounting purposes.
On March 1, 2019, the underwriters of the IPO exercised their option to purchase an additional 837,272 Class A shares at the IPO price of $14.00 per share, less underwriting discounts, which resulted in $11.0 million in additional net proceeds after deducting $0.7 million of underwriting discounts and commissions, such that there were 20,837,272 outstanding Class A shares. In connection with the exercise of the underwriters’ option to purchase an additional 837,272 Class A shares, NFE contributed such additional net proceeds to NFI in exchange for 837,272 NFI LLC Units.
NFE is a holding company whose sole material asset is a controlling equity interest in NFI. As the sole managing member of NFI, NFE operates and controls all of the business and affairs of NFI, and through NFI and its subsidiaries, conducts the Company’s historical business. The contribution of the assets of New Fortress Energy Holdings and net proceeds from the IPO to NFI was treated as a reorganization of entities under common control. As a result, NFE presented the condensed consolidated balances sheets and statements of operations and comprehensive loss of New Fortress Energy Holdings for all periods prior to the IPO.
On June 3, 2020, the Company entered into a mutual agreement (the “Mutual Agreement”) with the members holding the majority voting interest in New Fortress Energy Holdings (“Exchanging Members”) and NFE Sub LLC (a wholly-owned subsidiary of the Company). Pursuant to the Mutual Agreement, the Exchanging Members agreed to deliver a block redemption notice in accordance with the Amended and Restated Limited Liability Company Agreement of New Fortress Intermediate LLC (the “NFI LLCA”) with respect to all of the NFI LLC Units, together with an equal number of Class B shares of the Company, that such Exchanging Members indirectly own as members of New Fortress Energy Holdings. Pursuant to the Mutual Agreement, the Company agreed to exercise the Call Right (as defined in the NFI LLCA), pursuant to which the Company would acquire such NFI LLC Units and such Class B shares in exchange for Class A shares of the Company (the “Exchange Transactions”). The Exchange Transactions were completed on June 10, 2020. In connection with the closing of the Exchange Transactions, the Company issued 144,342,572 Class A shares in exchange for an equal number of NFI LLC Units, together with an equal number of Class B shares of the Company. Following the completion of the Exchange Transactions, the Company owns all of the NFI LLC Units directly or indirectly and no Class B shares remain outstanding. As of June 30, 2020, NFE has 168,587,346 Class A shares outstanding.
Prior to the Exchange Transactions, the Company recognized the Exchanging Members’ economic interest in NFI as non-controlling interest in the Company’s condensed consolidated financial statements. Results of operations for the period prior to the date of the Exchange Transactions, June 10, 2020, was attributed to non-controlling interest based on the Exchanging Members’ interest in NFI; subsequent to the Exchange Transactions, results of operations, excluding results attributable to other investors in non-wholly owned subsidiaries, were recognized as net income or loss attributable to stockholders. Amounts that were attributable to these Exchanging Members' prior interest in NFI previously shown as non-controlling interest on the Company’s consolidated balance sheets have been reclassified to Class A shares.
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| Use of estimates |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include relative fair value allocation between revenue and lease components of contracts with customers, total consideration and fair value of identifiable net assets related to acquisitions and the fair value of equity awards granted to both employees and non-employees. Management evaluates its estimates and related assumptions regularly. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.
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| Legal and contingencies |
The Company may be involved in legal actions in the ordinary course of business, including governmental and administrative investigations, inquiries and proceedings concerning employment, labor, environmental and other claims. The Company will recognize a loss contingency in the condensed consolidated financial statements when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. The Company will disclose any loss contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred. Gain contingencies are not recorded until they are realized.
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| Revenue recognition |
The Company’s contracts with customers may contain one or several performance obligations usually consisting of the sale of LNG, natural gas, and beginning in the first quarter of 2020, power and steam which are outputs from the Company’s natural gas-fueled infrastructure. The transaction price for each of these contracts is structured using similar inputs and factors regardless of the output delivered to the customer. The customers consume the benefit of the natural gas, power and steam when they are delivered by the Company to the customer’s power generation facilities or interconnection facility. Natural gas, power and steam qualify as a series with revenue being recognized over time using an output method, based on the quantity of natural gas, power, or steam that the customer has consumed. LNG is typically delivered in containers transported by truck to customer sites. Revenue from sales of LNG delivered by truck is recognized at the point in time at which physical possession and the risks and rewards of ownership transfer to the customer, either when the containers are shipped or delivered to the customers’ storage facilities, depending on the terms of the contract. Because the nature, timing and uncertainty of revenue and cash flows are substantially the same for LNG, natural gas, power and steam, the Company has presented Operating revenue on an aggregated basis.
The Company has concluded that variable consideration included in its agreements meets the exception for allocating variable consideration. As such, the variable consideration for these contracts is allocated to each distinct unit of LNG, natural gas, power or steam delivered and recognized when that distinct unit is delivered to the customer.
The Company’s contracts with customers to supply natural gas or LNG may contain a lease of equipment. The Company allocates consideration received from customers between lease and non-lease components based on the relative fair value of each component. The fair value of the lease component is estimated based on the estimated standalone selling price of the same or similar equipment leased to the customer. The Company estimates the fair value of the non-lease component by forecasting volumes and pricing of gas to be delivered to the customer over the lease term.
The leases of certain facilities and equipment to customers are accounted for as financing or operating leases. The current and non-current portion of financing leases are recorded within Prepaid expenses and other current assets and Finance leases, net on the condensed consolidated balance sheets, respectively. The lease payments for finance leases are segregated into principal and interest components similar to a loan. Interest income is recognized on an effective interest method over the lease term and included in Other revenue in the condensed consolidated statements of operations and comprehensive loss. The principal component of the lease payment is reflected as a reduction to the net investment in the lease. For the Company’s operating leases, the amount allocated to the leasing component is recognized over the lease term as Other revenue in the condensed consolidated statements of operations and comprehensive loss.
In addition to the revenue recognized from the leasing components of agreements with customers, Other revenue includes revenue recognized from the construction, installation and commissioning of equipment, inclusive of natural gas used in the commissioning process, to transform customers’ facilities to operate utilizing natural gas or to allow customers to receive power or other outputs from our natural gas-fueled power generation facilities. Revenue from these development services is recognized over time as the Company transfers control of the asset to the customer or based on the quantity of natural gas consumed as part of commissioning the customer’s facilities. If the customer is not able to obtain control over the asset under construction until such services are completed, revenue is recognized when the services are completed and the customer has control of the infrastructure. Such agreements may also include a significant financing component, and the Company recognizes revenue for the interest income component over the term of the financing as Other revenue.
Shipping and handling costs are not considered to be separate performance obligations. These costs are recognized in the period in which the costs are incurred and presented within Cost of sales in the condensed consolidated statements of operations and comprehensive loss. All such shipping and handling activities are performed prior to the customer obtaining control of the LNG or natural gas.
The Company collects sales taxes from its customers based on sales of taxable products and remits such collections to the appropriate taxing authority. The Company has elected to present sales tax collections in the condensed consolidated statements of operations and comprehensive loss on a net basis and, accordingly, such taxes are excluded from reported revenues.
The Company elected the practical expedient under which the Company does not adjust consideration for the effects of a significant financing component for those contracts where the Company expects at contract inception that the period between transferring goods to the customer and receiving payment from the customer will be one year or less.
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| Contract termination charges and loss on mitigation sales |
The Company has long-term supply agreements to purchase LNG, and the Company may incur termination charges to the extent that the Company cancels such contractual arrangements. Further, if the Company is unable to take physical possession of a portion of the contracted quantity of LNG due to capacity limitations, the supplier will attempt to sell the undelivered quantity through a mitigation sale. The Company may incur a loss on a mitigation sale if the cargo is unable to be sold for a price greater than the contracted price. These costs are included in a separate line in the condensed consolidated statements of operations and comprehensive loss because such costs are not related to inventory delivered to the Company’s customers.
During the three and six months ended June 30, 2020, the Company recognized a termination charge of $105,000 associated with an agreement with one of the Company’s LNG suppliers to terminate the obligation to purchase any LNG from this supplier for the remainder of 2020 in exchange for a cancellation fee of $105,000. Loss on mitigation sales of $18,906 and $19,114 were recognized in the three and six months ended June 30, 2020, respectively.
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Revenue from contracts with customers (Tables) |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from contracts with customers [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contract with Customer, Asset and Liability |
The Company has recognized a contract liability, comprised of unconditional payments due or paid under the contract with a customer prior to the Company’s satisfaction of the related performance obligations. The performance obligations are expected to be satisfied during the next 12 months, and the contract liability is classified within Other current liabilities on the condensed consolidated balance sheets. Contract assets are comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent periods. The contract liability and contract assets balances as of June 30, 2020 and December 31, 2019 are detailed below:
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| Other Revenue |
Operating revenue which includes revenue from sales of LNG and natural gas as well as outputs from the Company’s natural gas-fired power generation facilities, including power and steam, was $76,177 and $31,738 for the three months ended June 30, 2020 and 2019, respectively. Operating revenue was $139,679 and $57,876 for the six months ended June 30, 2020 and 2019, respectively. During March 2020, the Company began to deliver power and steam recognizing $6,946 and $8,677 in operating revenue for the three and six months ended June 30, 2020, respectively. Other revenue includes revenue for development services as well as lease and other revenue. The table below summarizes the balances in Other revenue:
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| Remaining Performance Obligations |
The Company has arrangements in which LNG, natural gas or outputs from the Company’s power generation facilities are sold on a “take-or-pay” basis whereby the customer is obligated to pay for the minimum guaranteed volumes even if it does not take delivery of them. The price under these agreements is typically based on a market index plus a fixed margin. The fixed transaction price allocated to the remaining performance obligations under these arrangements is $4,410,159 as of June 30, 2020, representing the fixed margin multiplied by the outstanding minimum guaranteed volumes. The Company expects to recognize this revenue over the following time periods. The pattern of recognition reflects the minimum guaranteed volumes in each period:
|
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Operating Lease Costs |
For the three months and six months ended June 30, 2020, the Company’s operating lease cost recorded within the condensed consolidated statements of operations and comprehensive loss were as follows:
|
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| Supplemental Cash Flow Information Related to Leases |
Cash paid for operating leases is reported in operating activities in the condensed consolidated statements of cash flows. Supplemental cash flow information related to leases was as follows for the six months ended June 30, 2020:
|
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| Future Payments Due under Operating Leases |
The future payments due under operating leases as of June 30, 2020 is as follows:
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| Future Annual Minimum Lease Payments for Operating Leases |
Future annual minimum lease payments for operating leases as of December 31, 2019, prepared in accordance with accounting standards prior to the adoption of ASC 842, were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment Subject to Operating Leases |
In the Company’s agreements to sell LNG or natural gas to customers, the Company may also lease certain equipment to customers which are accounted for either as a finance or an operating lease. Property, plant and equipment subject to operating leases is included within ISO containers and other equipment within Note 12. Property, plant and equipment, net.
|
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| Operating and Financing Lease Payments to be Received |
The following table shows the expected future lease payments as of June 30, 2020, for the remainder of 2020 through 2024 and thereafter:
|
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Fair value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Assets and Financial Liabilities |
The following table presents the Company’s financial assets and financial liabilities that are measured at fair value as of June 30, 2020 and December 31, 2019:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value and Currency Translation Adjustment |
The Company estimates fair value of the derivative liability and equity agreement using a discounted cash flows method with discount rates based on the average yield curve for bonds with similar credit ratings and matching terms to the discount periods as well as a probability of the contingent event occurring. The table below summarizes the fair value adjustment, recorded within Other expense (income), net in the condensed consolidated statements of operations and comprehensive loss, and currency translation adjustment, recorded within the Other comprehensive loss, for the three and six months ended June 30, 2020 and 2019:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted cash (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted cash [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted Cash |
As of June 30, 2020 and December 31, 2019, restricted cash consisted of the following:
|
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Inventory (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Inventory [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Inventory |
As of June 30, 2020 and December 31, 2019, inventory consisted of the following:
|
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Prepaid expenses and other current assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid expenses and other current assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid Expenses and Other Current Assets |
As of June 30, 2020 and December 31, 2019, prepaid expenses and other current assets consisted of the following:
|
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Construction in progress (Tables) |
6 Months Ended | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||
| Construction in Progress [Abstract] | ||||||||||||||||||||||||||
| Construction in Progress Activity |
The Company’s construction in progress activity during the six months ended June 30, 2020 is detailed below:
|
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Property, plant and equipment, net (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, plant and equipment, net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment, Net |
As of June 30, 2020 and December 31, 2019, the Company’s property, plant and equipment, net consisted of the following:
|
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Intangible assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Composition of Intangible Assets |
The following table summarizes the composition of intangible assets as of June 30, 2020 and December 31, 2019:
|
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Other non-current assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-current assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Non-Current Assets |
As of June 30, 2020 and December 31, 2019, Other non-current assets consisted of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued liabilities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Liabilities |
As of June 30, 2020 and December 31, 2019, accrued liabilities consisted of the following:
|
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term Debt |
As of June 30, 2020 and December 31, 2019, debt consisted of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Expense |
Interest and related amortization of debt issuance costs recognized during major development and construction projects are capitalized and included in the cost of the project. Interest expense, net of amounts capitalized, recognized for the three and six months ended June 30, 2020 and 2019 consisted of the following:
|
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Earnings per share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Effects Presented in Anti-dilutive |
The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the periods presented because its effects would have been anti-dilutive.
|
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Share-based compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU Activity |
The following table summarizes the RSU activity for the six months ended June 30, 2020:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Compensation Expense |
The following table summarizes the share-based compensation expense for the Company’s RSUs recorded for the three and six months ended June 30, 2020 and 2019:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related party transactions (Tables) |
6 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||
| Related party transactions [Abstract] | ||||||||||||||||||||||||||||
| Due to/from Affiliates |
The table below summarizes the balances outstanding with affiliates at June 30, 2020 and December 31, 2019:
|
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Organization (Details) |
6 Months Ended |
|---|---|
|
Jun. 30, 2020
Segment
| |
| Organization [Abstract] | |
| Number of operating segments | 1 |
Adoption of new and revised standards (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Adoption of New and Revised Standards [Abstract] | ||
| Right-of-use asset | $ 106,993 | $ 0 |
| Lease liability | 84,001 | |
| Adjustments to retained earnings, net of tax | $ (192,852) | (45,823) |
| ASU 2016-02 [Member] | ||
| Adoption of New and Revised Standards [Abstract] | ||
| Right-of-use asset | 124,774 | |
| Lease liability | 103,874 | |
| ASU 2016-02 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
| Adoption of New and Revised Standards [Abstract] | ||
| Adjustments to retained earnings, net of tax | (9,085) | |
| Adjustments to retained earnings, tax | $ (2,945) |
Leases, Components of Operating Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
|
| Operating lease cost [Abstract] | ||
| Fixed lease cost | $ 6,596 | $ 16,863 |
| Variable lease cost | 74 | 713 |
| Short-term lease cost | 330 | 616 |
| Lease cost - Cost of Sales | 6,109 | 15,460 |
| Lease cost - Operations and maintenance | 440 | 828 |
| Lease cost - Selling, general and administrative | 451 | 1,904 |
| Capitalized lease cost | $ 7,474 | $ 8,013 |
Leases, Lessee Operating Lease Supplemental Cash Flow Information (Details) $ in Thousands |
6 Months Ended |
|---|---|
|
Jun. 30, 2020
USD ($)
| |
| Supplemental cash flow information related to leases [Abstract] | |
| Operating cash outflows for operating lease liabilities | $ 23,257 |
| Right-of-use assets obtained in exchange for new operating leases | $ 128,592 |
Leases, Future Payments Due under Operating Leases (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
| Future minimum payments of operating lease liability [Abstract] | ||
| Due remainder of 2020 | $ 14,737 | |
| 2021 | 35,398 | |
| 2022 | 18,307 | |
| 2023 | 7,002 | |
| 2024 | 7,114 | |
| Thereafter | 33,780 | |
| Total lease payments | 116,338 | |
| Less: effects of discounting | 32,337 | |
| Present value of lease liabilities | 84,001 | |
| Current lease liability | 26,835 | $ 0 |
| Non-current lease liability | $ 57,166 | $ 0 |
| Weighted-average remaining lease term | 5 years 9 months 18 days | |
| Weighted average discount rate | 8.60% | |
| Noncancelable term of vessel lease | 5 years | |
| Fixed payments for lease and non-lease components | $ 69,704 |
Leases, Future Annual Minimum Lease Payments for Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
| Operating lease future minimum payments before adoption of ASC 842 [Abstract] | |||
| 2020 | $ 37,776 | ||
| 2021 | 35,478 | ||
| 2022 | 18,387 | ||
| 2023 | 7,083 | ||
| 2024 | 7,151 | ||
| Thereafter | 26,458 | ||
| Total | $ 132,333 | ||
| Operating leases, rent expense [Abstract] | |||
| Rental expense | $ 8,939 | $ 17,376 |
Leases, Property, Plant and Equipment Subject to Operating Leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Property, Plant and Equipment Subjected to Operating Lease [Abstract] | ||
| Total property, plant and equipment, net | $ 475,198 | $ 192,222 |
| Lessor [Member] | ||
| Property, Plant and Equipment Subjected to Operating Lease [Abstract] | ||
| Property, plant and equipment | 10,955 | |
| Accumulated depreciation | (642) | |
| Total property, plant and equipment, net | $ 10,313 |
Leases, Expected Future Lease Payments (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
|---|---|
| Financing leases, lease receivable, fiscal year maturity [Abstract] | |
| Remainder of 2020 | $ 152 |
| 2021 | 303 |
| 2022 | 298 |
| 2023 | 304 |
| 2024 | 304 |
| Thereafter | 836 |
| Total | 2,197 |
| Less: Imputed interest | 1,029 |
| Present value of total lease receipts | 1,168 |
| Current finance leases, net | 253 |
| Non-current finance leases, net | 915 |
| Operating lease, payments, fiscal year maturity [Abstract] | |
| Reminder of 2020 | 109 |
| 2021 | 206 |
| 2022 | 194 |
| 2023 | 196 |
| 2024 | 197 |
| Thereafter | 860 |
| Total | $ 1,762 |
Restricted cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Restricted cash [Abstract] | ||
| Collateral for performance under customer agreements | $ 15,000 | $ 15,000 |
| Collateral for LNG purchases | 26,476 | 35,000 |
| Collateral for letters of credit and performance bonds | 6,220 | 7,388 |
| Debt service reserve account | 8,131 | 8,299 |
| Other restricted cash | 250 | 250 |
| Total restricted cash | 56,077 | 65,937 |
| Current restricted cash | 32,946 | 30,966 |
| Non-current restricted cash | $ 23,131 | $ 34,971 |
Inventory (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
| Inventory [Abstract] | |||||
| LNG and natural gas inventory | $ 41,778 | $ 41,778 | $ 57,436 | ||
| Automotive diesel oil inventory | 5,167 | 5,167 | 4,746 | ||
| Materials, supplies and other | 3,940 | 3,940 | 1,250 | ||
| Total inventory | 50,885 | 50,885 | $ 63,432 | ||
| Inventory adjustments | $ 0 | $ 0 | $ 0 | $ 0 | |
Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Prepaid expenses and other current assets [Abstract] | ||
| Prepaid expenses | $ 6,348 | $ 7,458 |
| Prepaid LNG | 3,312 | 7,097 |
| Due from affiliates (Note 21) | 1,460 | 1,577 |
| Other current assets | 17,821 | 23,602 |
| Total prepaid expenses and other expenses | $ 28,941 | $ 39,734 |
Investment in equity securities (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
| Investment in equity securities [Abstract] | |||||
| Investment cost | $ 3,667 | $ 3,667 | |||
| Number of shares (in shares) | 295,256 | 295,256 | 295,256 | ||
| Fair value | $ 323 | $ 323 | $ 2,540 | ||
| Unrealized (gain)/loss | $ (183) | $ 1,698 | $ 2,217 | $ 802 | |
Construction in progress (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Construction in Progress [Roll Forward] | ||
| Balance at beginning of period | $ 466,587 | |
| Additions | 80,541 | |
| Transferred to property, plant and equipment, net (Note 12) | (200,177) | |
| Balance at end of period | 346,951 | |
| Interest costs capitalized | $ 17,902 | $ 9,111 |
Property, plant and equipment, net (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
| Property, Plant and Equipment, Net [Abstract] | |||||
| Accumulated depreciation | $ (43,380) | $ (43,380) | $ (16,911) | ||
| Total property, plant and equipment, net | 475,198 | 475,198 | 192,222 | ||
| Adjustment to retained earnings | (192,852) | (192,852) | (45,823) | ||
| Depreciation | 7,539 | $ 1,983 | 12,750 | $ 3,563 | |
| Cost of Sales [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Depreciation | 223 | $ 147 | 450 | $ 305 | |
| ASU 2016-02 [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | 92,207 | ||||
| Accumulated depreciation | 13,932 | ||||
| Adjustment to net investment in direct financing lease | 91,005 | ||||
| ASU 2016-02 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Adjustment to retained earnings | (9,085) | ||||
| Adjustments to retained earnings, tax | (2,945) | ||||
| CHP Facilities [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | 117,496 | 117,496 | 0 | ||
| Terminal and Power Plant Equipment [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | 105,705 | 105,705 | 14,981 | ||
| LNG Liquefaction Facilities [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | 65,992 | 65,992 | 66,273 | ||
| Gas Terminals [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | 72,394 | 72,394 | 52,781 | ||
| Gas Pipelines [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | 58,974 | 58,974 | 11,692 | ||
| ISO Containers and Other Equipment [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | 74,071 | 74,071 | 39,951 | ||
| Land [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | 15,637 | 15,637 | 15,401 | ||
| Leasehold Improvements [Member] | |||||
| Property, Plant and Equipment, Net [Abstract] | |||||
| Property, plant and equipment, gross | $ 8,309 | $ 8,309 | $ 8,054 | ||
Intangible assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
| Intangible Assets, Net [Abstract] | |||||
| Definite-Lived Intangible Assets, Accumulated Amortization | $ 1,874 | $ 1,874 | $ 1,337 | ||
| Total Intangible Assets, Gross Carrying Amount | 44,805 | 44,805 | 44,877 | ||
| Total Intangible Assets, Net Carrying Amount | 42,931 | $ 42,931 | $ 43,540 | ||
| Weighted average remaining amortization period for intangible assets | 38 years | 38 years 9 months 18 days | |||
| Amortization | 282 | $ 286 | $ 552 | $ 564 | |
| Easements [Member] | |||||
| Intangible Assets, Net [Abstract] | |||||
| Indefinite-Lived Intangible Assets, Carrying Amount | 1,168 | 1,168 | $ 1,161 | ||
| Shannon LNG Leases and Permits [Member] | |||||
| Intangible Assets, Net [Abstract] | |||||
| Definite-Lived Intangible Assets, Gross Carrying Amount | 42,078 | 42,078 | 42,157 | ||
| Definite-Lived Intangible Assets, Accumulated Amortization | 1,709 | 1,709 | 1,198 | ||
| Definite-Lived Intangible Assets, Net Carrying Amount | 40,369 | $ 40,369 | $ 40,959 | ||
| Definite-Lived Intangible Assets, Weighted Average Life | 40 years | 40 years | |||
| Easements [Member] | |||||
| Intangible Assets, Net [Abstract] | |||||
| Definite-Lived Intangible Assets, Gross Carrying Amount | 1,559 | $ 1,559 | $ 1,559 | ||
| Definite-Lived Intangible Assets, Accumulated Amortization | 165 | 165 | 139 | ||
| Definite-Lived Intangible Assets, Net Carrying Amount | $ 1,394 | $ 1,394 | $ 1,420 | ||
| Definite-Lived Intangible Assets, Weighted Average Life | 30 years | 30 years | |||
Other non-current assets (Details) $ in Thousands |
6 Months Ended | |
|---|---|---|
|
Jun. 30, 2020
USD ($)
SalesContract
|
Dec. 31, 2019
USD ($)
|
|
| Other non-current assets [Abstract] | ||
| Nonrefundable deposit | $ 24,643 | $ 22,262 |
| Contract asset (Note 4) | 23,525 | 19,474 |
| Cost to fulfill (Note 4) | 9,533 | 8,508 |
| Unbilled receivables (Note 4) | 6,643 | 0 |
| Upfront payments to customers | 5,739 | 5,904 |
| Port access rights and initial lease costs | 0 | 17,762 |
| Other | 7,087 | 7,716 |
| Total other non-current assets | $ 77,170 | $ 81,626 |
| Number of sales contracts | SalesContract | 2 |
Accrued liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Accrued liabilities [Abstract] | ||
| Accrued contract termination charges | $ 105,000 | $ 0 |
| Accrued construction costs | 8,689 | 25,037 |
| Accrued interest | 13,282 | 0 |
| Accrued bonuses | 8,216 | 14,991 |
| Other accrued expenses | 30,105 | 14,915 |
| Total accrued liabilities | $ 165,292 | $ 54,943 |
Debt (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
| Long-term Debt, Current and Noncurrent [Abstract] | |||
| Total debt | $ 950,238 | $ 950,238 | $ 619,057 |
| Credit Agreement, due January 15, 2023 [Member] | |||
| Long-term Debt, Current and Noncurrent [Abstract] | |||
| Total debt | $ 773,895 | $ 773,895 | 0 |
| Maturity date | Jan. 15, 2023 | Jan. 15, 2023 | |
| Term Loan Facility, due January 21, 2020 [Member] | |||
| Long-term Debt, Current and Noncurrent [Abstract] | |||
| Total debt | $ 0 | $ 0 | 495,000 |
| Maturity date | Jan. 21, 2020 | ||
| Senior Secured Bonds, due September 2034 [Member] | |||
| Long-term Debt, Current and Noncurrent [Abstract] | |||
| Total debt | $ 71,052 | 71,052 | 70,960 |
| Maturity date | Sep. 30, 2034 | ||
| Senior Secured Bonds, due December 2034 [Member] | |||
| Long-term Debt, Current and Noncurrent [Abstract] | |||
| Total debt | $ 62,968 | 62,968 | 10,823 |
| Maturity date | Dec. 31, 2034 | ||
| Senior Unsecured Bonds, due September 2036 [Member] | |||
| Long-term Debt, Current and Noncurrent [Abstract] | |||
| Total debt | $ 42,323 | $ 42,323 | $ 42,274 |
| Maturity date | Sep. 30, 2036 |
Debt, The Credit Agreement (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jan. 10, 2020 |
Jun. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Aug. 16, 2018 |
|
| Credit Agreement [Abstract] | ||||||
| Outstanding principal amount | $ 950,238 | $ 950,238 | $ 619,057 | |||
| Credit Agreement [Member] | ||||||
| Credit Agreement [Abstract] | ||||||
| Aggregate principal amount | $ 800,000 | |||||
| Debt maturity date | Jan. 15, 2023 | Jan. 15, 2023 | ||||
| Variable interest rate | 6.25% | |||||
| Increase in interest rate | 1.50% | |||||
| Outstanding principal amount | $ 773,895 | $ 773,895 | 0 | |||
| Remaining unamortized deferred financing costs | $ 36,313 | $ 26,105 | $ 26,105 | |||
| Credit Agreement [Member] | Interest Rate Floor [Member] | ||||||
| Credit Agreement [Abstract] | ||||||
| Variable interest rate | 1.50% | |||||
| Term Loan Facility, due January 21, 2020 [Member] | ||||||
| Credit Agreement [Abstract] | ||||||
| Aggregate principal amount | $ 500,000 | $ 240,000 | ||||
| Debt maturity date | Jan. 21, 2020 | |||||
| Variable interest rate | 4.00% | |||||
| Increase in interest rate | 0.50% | |||||
| Outstanding principal amount | $ 0 | $ 0 | 495,000 | |||
| Remaining unamortized deferred financing costs | $ 0 |
Debt, Term Loan Facility (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
|
Mar. 21, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
Extension
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Aug. 16, 2018
USD ($)
Lender
|
|
| Term Loan Facility [Abstract] | ||||||||
| Loss on extinguishment of debt | $ 0 | $ 0 | $ (9,557) | $ 0 | ||||
| Term Loan Facility, due January 21, 2020 [Member] | ||||||||
| Term Loan Facility [Abstract] | ||||||||
| Number of lenders | Lender | 2 | |||||||
| Aggregate principal amount | $ 500,000 | $ 240,000 | ||||||
| Outstanding borrowings | $ 500,000 | $ 280,000 | ||||||
| Additional borrowing amount | $ 220,000 | |||||||
| Debt instrument, basis spread on variable rate | 4.00% | |||||||
| Debt instrument, frequency of periodic payment | quarterly | |||||||
| Debt instrument, periodic payment | $ 1,250 | |||||||
| Unamortized deferred financing cost | $ 0 | |||||||
| Number of extensions for maturity date | Extension | 2 | |||||||
| Additional extended maturity period | 6 months | |||||||
| Percentage of fee payable in outstanding principal for extension of maturity date | 1.00% | 1.00% | ||||||
| Increase in interest rate | 0.50% | |||||||
| Loss on extinguishment of debt | $ (9,557) | |||||||
| Term Loan Facility, due January 21, 2020 [Member] | Floor Rate [Member] | ||||||||
| Term Loan Facility [Abstract] | ||||||||
| Debt instrument, basis spread on variable rate | 1.00% | |||||||
| Term Loan Facility, due January 21, 2020 [Member] | Federal Funds Rate [Member] | ||||||||
| Term Loan Facility [Abstract] | ||||||||
| Debt instrument, basis spread on variable rate | 0.50% | |||||||
| Term Loan Facility, due January 21, 2020 [Member] | LIBOR [Member] | ||||||||
| Term Loan Facility [Abstract] | ||||||||
| Debt instrument, basis spread on variable rate | 1.00% | |||||||
| Debt instrument, term of variable rate | 1 month | |||||||
| Interest rate plus spread | 3.00% | |||||||
Debt, South Power Bonds (Details) - USD ($) $ in Thousands |
1 Months Ended | 6 Months Ended | 12 Months Ended | |
|---|---|---|---|---|
Jan. 31, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
Sep. 02, 2019 |
|
| Senior Secured and Unsecured Bonds [Abstract] | ||||
| Debt service reserve account | $ 8,131 | $ 8,299 | ||
| South Power [Member] | ||||
| Senior Secured and Unsecured Bonds [Abstract] | ||||
| Debt service reserve account | $ 8,131 | |||
| Senior Secured Bonds [Member] | South Power [Member] | ||||
| Senior Secured and Unsecured Bonds [Abstract] | ||||
| Debt instrument, issuable | 63,000 | $ 73,317 | ||
| Proceeds from issuance of bonds | $ 52,144 | 10,856 | ||
| Fixed interest rate | 8.25% | |||
| Maturity period | 15 years | |||
| Non-payment of principal due period | 7 years | |||
| Frequency of payments | quarterly | |||
| Percentage of quarterly principal payment | 1.60% | |||
| Percentage of balloon payment due upon maturity | 50.00% | |||
| Senior Unsecured Bonds [Member] | South Power [Member] | ||||
| Senior Secured and Unsecured Bonds [Abstract] | ||||
| Debt instrument, issuable | $ 43,683 | |||
| Fixed interest rate | 11.00% | |||
| Maturity date | Sep. 30, 2036 | |||
| Non-payment of principal due period | 9 years | |||
| Frequency of payments | quarterly | |||
| Senior Secured Bonds and Senior Unsecured Bonds [Member] | South Power [Member] | ||||
| Senior Secured and Unsecured Bonds [Abstract] | ||||
| Fees paid | $ 3,892 | |||
| Unamortized deferred financing cost | $ 3,657 | $ 3,799 |
Debt, Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Interest costs [Abstract] | ||||
| Amortization of debt issuance costs | $ 6,965 | $ 2,589 | ||
| Interest expense | $ 17,198 | $ 6,199 | 31,088 | 9,483 |
| Debt [Member] | ||||
| Interest costs [Abstract] | ||||
| Interest per contractual rates | 19,766 | 8,475 | 38,640 | 13,364 |
| Amortization of debt issuance costs | 5,728 | 3,166 | 10,350 | 5,230 |
| Total interest costs | 25,494 | 11,641 | 48,990 | 18,594 |
| Capitalized interest | 8,296 | 5,442 | 17,902 | 9,111 |
| Interest expense | $ 17,198 | $ 6,199 | $ 31,088 | $ 9,483 |
Income taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jun. 10, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Feb. 04, 2019 |
|
| Loss before Income Taxes [Abstract] | ||||||
| Percentage of NFI operations included in income tax provision | 100.00% | |||||
| Effective tax rate | (0.07%) | (0.30%) | (0.05%) | (0.36%) | ||
| Tax expense | $ 117 | $ 155 | $ 113 | $ 401 | ||
| Statutory tax rate | 21.00% | 21.00% | 21.00% | 21.00% | ||
| Uncertain tax positions | $ 0 | $ 0 | ||||
| IPO [Member] | ||||||
| Loss before Income Taxes [Abstract] | ||||||
| Deferred tax asset | $ 42,783 | |||||
Earnings per share (Details) $ / shares in Units, $ in Thousands |
1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Feb. 04, 2019
shares
|
Feb. 04, 2019
USD ($)
shares
|
Mar. 31, 2019
USD ($)
shares
|
Jun. 30, 2020
USD ($)
$ / shares
shares
|
Mar. 31, 2020
USD ($)
shares
|
Jun. 30, 2019
USD ($)
$ / shares
shares
|
Jun. 30, 2020
USD ($)
$ / shares
shares
|
Jun. 30, 2019
USD ($)
$ / shares
shares
|
Dec. 31, 2019
shares
|
Dec. 31, 2018
shares
|
|||||||
| Numerator [Abstract] | ||||||||||||||||
| Net loss | $ | $ (8,003) | $ (52,289) | $ (166,519) | $ (60,055) | $ (51,233) | $ (226,574) | $ (111,525) | |||||||||
| Less: net loss attributable to non-controlling interests | $ | 29,094 | 45,047 | 80,851 | 91,782 | ||||||||||||
| Net loss attributable to stockholders | $ | $ (137,425) | $ (6,186) | $ (145,723) | $ (19,743) | ||||||||||||
| Denominator [Abstract] | ||||||||||||||||
| Weighted-average shares-basic and diluted (in shares) | 57,341,215 | 22,114,002 | 41,771,849 | 18,154,939 | ||||||||||||
| Net loss per share - basic and diluted (in dollars per share) | $ / shares | $ (2.40) | $ (0.28) | $ (3.49) | $ (1.09) | ||||||||||||
| Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Effects Presented in Anti-dilutive [Abstract] | ||||||||||||||||
| Anti-dilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 2,918,383 | 152,450,757 | ||||||||||||||
| Class A [Member] | Common Stock [Member] | ||||||||||||||||
| Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||
| Shares outstanding (in shares) | 20,837,272 | 169,174,104 | 24,820,003 | 20,837,272 | 169,174,104 | 20,837,272 | 23,607,096 | 0 | ||||||||
| Class B [Member] | ||||||||||||||||
| Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Effects Presented in Anti-dilutive [Abstract] | ||||||||||||||||
| Anti-dilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | [1] | 0 | 147,058,824 | |||||||||||||
| Class B [Member] | Common Stock [Member] | ||||||||||||||||
| Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||
| Shares outstanding (in shares) | 147,058,824 | 0 | 144,342,572 | 147,058,824 | 0 | 147,058,824 | 144,342,572 | 0 | ||||||||
| IPO [Member] | ||||||||||||||||
| Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||
| Stock split issued and outstanding shares effected in connection with IPO | 2.16 | |||||||||||||||
| IPO [Member] | Class B [Member] | ||||||||||||||||
| Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||
| Effects of reorganization transactions (in shares) | 147,058,824 | 147,058,824 | ||||||||||||||
| Shares outstanding (in shares) | 147,058,824 | 147,058,824 | ||||||||||||||
| Unvested RSU [Member] | ||||||||||||||||
| Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Effects Presented in Anti-dilutive [Abstract] | ||||||||||||||||
| Anti-dilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | [2] | 1,627,673 | 3,959,725 | |||||||||||||
| Shannon Equity Agreement [Member] | ||||||||||||||||
| Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Effects Presented in Anti-dilutive [Abstract] | ||||||||||||||||
| Anti-dilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | [3] | 1,290,710 | 1,432,208 | |||||||||||||
| ||||||||||||||||
Share-based compensation (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Restricted Stock Units [Member] | |||||
| Number of Shares [Roll Forward] | |||||
| Non-vested RSUs, beginning balance (in shares) | 3,137,415 | 3,137,415 | |||
| Granted (in shares) | 109,409 | ||||
| Vested and shares issued (in shares) | (1,491,964) | ||||
| Forfeited (in shares) | (127,187) | ||||
| Non-vested RSUs, ending balance (in shares) | 1,627,673 | 1,627,673 | |||
| Weighted Average Grant Date Fair Value Per Share [Abstract] | |||||
| Non-vested RSUs, beginning balance (in dollars per share) | $ 13.44 | $ 13.44 | |||
| Granted (in dollars per share) | 14.47 | ||||
| Vested and shares issued (in dollars per share) | 13.46 | ||||
| Forfeited (in dollars per share) | 13.51 | ||||
| Non-vested RSUs, ending balance (in dollars per share) | $ 13.49 | $ 13.49 | |||
| Share-based Payment Arrangement [Abstract] | |||||
| Share-based compensation expense | $ 1,922 | $ 8,971 | $ 4,430 | $ 28,008 | |
| Compensation expense recognized for forfeited RSU awards | 488 | 0 | 549 | 0 | |
| Unrecognized compensation cost | 13,515 | $ 13,515 | |||
| Weighted-average remaining vesting period of non-vested stock (in years) | 1 year 9 months | ||||
| Restricted Stock Units [Member] | Operations and Maintenance [Member] | |||||
| Share-based Payment Arrangement [Abstract] | |||||
| Share-based compensation expense | 253 | 260 | $ 490 | 329 | |
| Restricted Stock Units [Member] | Selling, General and Administrative Expenses [Member] | |||||
| Share-based Payment Arrangement [Abstract] | |||||
| Share-based compensation expense | 1,669 | $ 8,711 | $ 3,940 | $ 27,679 | |
| Restricted Stock Units [Member] | Minimum [Member] | |||||
| Share-based Payment Arrangement [Abstract] | |||||
| Vesting period | 10 months | ||||
| Restricted Stock Units [Member] | Maximum [Member] | |||||
| Share-based Payment Arrangement [Abstract] | |||||
| Vesting period | 3 years | ||||
| Performance Share Units [Member] | |||||
| Share-based Payment Arrangement [Abstract] | |||||
| Unrecognized compensation cost | $ 32,073 | $ 32,073 | |||
| Weighted-average remaining vesting period of non-vested stock (in years) | 1 year 6 months | ||||
| Performance Share Units [Member] | Employees and Non-employees [Member] | |||||
| Number of Shares [Roll Forward] | |||||
| Granted (in shares) | 1,109,777 | ||||
| Performance Share Units [Member] | Minimum [Member] | |||||
| Number of Shares [Roll Forward] | |||||
| Vested and shares issued (in shares) | 0 | ||||
| Performance Share Units [Member] | Maximum [Member] | |||||
| Number of Shares [Roll Forward] | |||||
| Vested and shares issued (in shares) | (2,219,554) | ||||
Related party transactions (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|---|
Aug. 31, 2018 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
| Related party transaction [Abstract] | ||||||
| Administrative and general expenses | $ 1,914 | $ 1,742 | $ 4,145 | $ 4,520 | ||
| Amount due to affiliates | 6,586 | 6,586 | $ 10,252 | |||
| Charter costs | 45 | 649 | 1,284 | 1,625 | ||
| Amounts due from affiliates | $ 1,460 | $ 1,460 | 1,577 | |||
| DevTech Investment [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Minority interest percentage in exchange for cash consideration | 10.00% | 10.00% | ||||
| Percentage of note payable purchased by affiliate | 10.00% | |||||
| Note payable due | $ 715 | $ 715 | 815 | |||
| Interest expense on note payable | 19 | 24 | 38 | 46 | ||
| Amounts due from affiliates | 343 | 343 | 443 | |||
| Fortress [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Amount due to affiliates | 3,465 | 3,465 | 5,083 | |||
| Fortress Affiliate [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Amount due to affiliates | 1,974 | 1,974 | 4,286 | |||
| Florida East Coast Industries [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Amount due to affiliates | 0 | 0 | 0 | |||
| Florida East Coast Industries [Member] | Selling, General and Administrative Expenses [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Lease expense | 38 | 223 | ||||
| Florida East Coast Industries [Member] | Land and Building [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Lease expense | 112 | 758 | ||||
| Florida East Coast Industries [Member] | Land [Member] | Operations and Maintenance [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Lease expense | 103 | 74 | 206 | 149 | ||
| Florida East Coast Industries [Member] | Construction in Progress [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Lease expense | 386 | |||||
| Fortress Affiliated Entities [Member] | ||||||
| Related party transaction [Abstract] | ||||||
| Amount due to affiliates | 1,147 | 1,147 | 883 | |||
| Amounts due from affiliates | 1,117 | 1,117 | $ 1,134 | |||
| Rent and administrative expenses | $ 0 | $ 607 | $ 849 | $ 1,026 | ||
Related party transactions, Due to/from Affiliates (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Related party transactions [Abstract] | ||
| Amounts due to affiliates | $ 6,586 | $ 10,252 |
| Amounts due from affiliates | $ 1,460 | $ 1,577 |
Subsequent events (Details) - Subsequent Events [Member] - Class A [Member] |
Aug. 07, 2020
$ / shares
shares
|
|---|---|
| Subsequent Events [Abstract] | |
| Number of LLC shares converted to Corporate shares (in shares) | shares | 1 |
| Par value per share (in dollars per share) | $ / shares | $ 0.01 |