Good day, and welcome to the NFE First Quarter 2025 Earnings Call. Today's conference is being recorded. At this time, I will be handing the call over to Matt Reinhard, Managing Director, for introductory remarks.

Good afternoon, everyone. Thank you for joining today's conference call, where we will be discussing our first quarter 2025 results. The call is being recorded and will be available by replay on the Investors section of our website under the subheading Events and Presentations. At the same location, you will find a presentation that we will walk through on today's call. Please review this as it includes important information on forward-looking statements and non-GAAP measures. With that, let me hand the call over to our Chairman and CEO, Wes Edens. Wes?

Great. Thanks, Matt. Welcome, everyone. So lots to go through here this afternoon and I'll try and make my own statements brief. Start with the core earnings for the quarter, very much in line with expectation. If you look at the yellow boxes on the piece of paper, you can see that post the first quarter of 2024, which is the last quarter that we had the FEMA claims online in Puerto Rico, we've had basically extremely consistent core earnings $110 million, $177 million but then $109 million, $116 million, so very much in line with that. Our forecast for the core earnings for the remainder of the year are basically very much in line with what this is for the first half and then accelerating the second half as we start to bring assets online, in particular those assets in Brazil. That said, the EBITDA that we had forecast for the quarter were less than that simply because we did not have any one-off results to add to it. Again, if you look at our numbers historically we've had a combination of core results plus one-off results and we simply didn't have any one-off results this quarter. That said, we expect EBITDA plus gains to be $1.25 billion to $1.5 billion for the year, which is higher than our previous estimate. We're actually off to quite a good start in that regard, in particular, when you consider the events of just today. We already had meaningful gains with our Jamaica sale, which I'll talk about in a second and there's a handful of other things that are going to be significant events for us to add to our core events. But our goal is the quality versus quantity of the earnings, in particular, what we are looking to generate…

Thanks a lot, Wes. Good afternoon, everyone. I'm pleased to be discussing our progress and outlook in Brazil. Over the past few years, we've made significance in strategic investments in the country laying the foundation for a high value and resilient business. After years of dedicated work and over billions of investment, we are finally approaching the full commercial operation dates of our key assets. One of our projects, a 624-megawatt combined cycle power plant is expected to reach COD in the second half of this year, while the second power plant, a 1.6 gigawatt open cycle plant is on track for COD by mid next year. This is a key moment for us. These investments are converting it to a long-term contracted assets, and we are very excited to be part of this transformation at NFE Brazil. In this Slide number 10, I wanted to highlight the Barcarena complex and its associated long-term contracts. These contracts, all of them are inflation linked; they are protected from gas price volatility and backed by strong credit ratings, providing stable and predictable cash flows for our business. Starting with the Norsk Hydro contract, we began deliveries in March 2024, under a 15-year gas supply agreement, which is indexed to Henry Hub plus $6.04 per million Btu adder, with part of the added adjusted by U.S. CPI on a yearly basis, as shown in this slide. The contract covers approximately 30 TBtus a year with a 90% take-or-pay. For CELBA 2, our 624-megawatt plant, we have a 25-year PPA with 100% take-or-pay during the second semester of each year, starting from COD expected to occur in the second semester of the year. The gas volumes here is approximately 18 TBtus a year, considering only the take-or-pay with price index to 91% of JKM plus another of $3.36 per million Btu, which is also adjusted by U.S. CPI on a yearly basis. Finally, at PortoCem, our 1.6 gigawatt plant, we secured this 15-year capacity contract with the national grid, which pays approximately $280 million for the availability of the plant, plus a dispatch components whenever the plant produces power. Assuming a 10% dispatch rate, it would translate into an approximately 12 TBtus a year of additional gas demand at a premium gas prices. These projects are secured by strong counterparties as mentioned by Wes, which demonstrates how robust our commercial foundation is. I will hand it over to Jeremy to walk you through the construction update.

Good afternoon, everybody. It's my pleasure to give you a very positive construction update this quarter. Since we last spoke on our CELBA power plant, as Leandro just mentioned, the 624-megawatt combined cycle plant. Since our last update, we've increased general progress by over 7%. On PortoCem, we've increased the progress by over 15%. That brings both of our plants now to a 95% completion for CELBA and over 54% completion for PortoCem. Those major milestones that we've achieved are actually in spite of the fact that in this previous quarter, we had a very intense rainy season to work through. In a couple of the months of the quarter, we had near 30-year historical levels of precipitation. And in the case of PortoCem, which is in a largely civil construction phase that was a significant achievement for the project team to not only maintain the float and the schedule improvement that we have, but also actually increased it a little bit. Back to CELBA 2 on the combined cycle plant at 95%, we're nearing a very important milestone of mechanical completion. We're in a phase right now, a very critical phase of the high-pressure hydro testing. We've tested the steam system up to 96 bar on our way to 300 bar eventually. Another important milestone of the 95% is that it means a different level of effort at our site. The 95% mechanical completion milestone effectively means that we can transfer the main level of effort from our construction contractor over to our power core provider, Mitsubishi, and allow them to after first fire, which we expect -- first fire of the gas turbine, which we expect at the end of August to take over the level of effort at site, and to start generating commissioning power. On PortoCem,…

Thank you, Jeremy. Turning to Slide number 12. I want to discuss the market outlook and the upcoming opportunities. We will focus on the capacity auction expected later this year. First of all, I mean, probably most of you heard about it, the auction that was originally scheduled to happen in June was canceled. And we believe this is a temporary delay, actually. The Ministry of Mines and Energy has stated publicly that he expects the auction to take place in 2025. And we expect rules to provide more clarity and fairness to the competition. Just to make it clear, the fundamentals haven't changed. Brazil still needs to contract in our estimate 10 to 15 gigawatts of capacity. The PPAs are expected to have CODs between 2026 and 2030, for both brownfields and Greenfield assets. And we will offer capacity payments similar to PortoCem with 15-year terms for Greenfield projects and gas indexed to JKN and TTF. While the postponement of the auction created some short-term noise in the country, we are confidence in the structural need for the auction. There is no question that Brazil needs the power. And if this action doesn't happen, the system could face real operational challenges. We're fully prepared as NFE Brazil. We are positioned to register over 2 gigawatts of projects in the upcoming auction. Additionally, more than 3 gigawatts of third-parties projects have requested gas proposals from us, showing clear market confidence and the competitiveness of our platform in Brazil. In short, we see a path for meaningful expansion of our business in Brazil with strong counterparties, solid regulatory support and rising demand for our integrated LNG to power model. Thank you very much, and I want to hand it over to Wes.

Great. Thanks, Leandro. Let me briefly talk about Puerto Rico because it's another big market for us with a lot of activity. Just a bit of a situational overview of what the energy system in Puerto Rico looks like. It's a very under-invested, very antiquated system that is in great need of repair and great need of new investment, in particular on the new generation side. There's been no power plants built that are material in the last 30 years. So the average power plant is quite old, which rotating equipment is really not to operate efficiently for 40, 50, 60 years. And so there's a lot of challenges in terms of the fleet that exists. Over 50% of it runs on some combination of oil and diesel. Contrast that to the mainland United States, where less than 1% of our electricity is operated on diesel. You can see there's a huge difference between utilities that we find in the mainland and what we see there. What that means is that the plan and the needs in the business in Puerto Rico on the energy side, we think are extremely clear. Number one, there's a lack of sufficient reserve, which hence means that they need temporary power, which is exactly what they have done in terms of going out for a bid for temporary power, especially with the upcoming summer and the demands on the system that happened when it gets hotter down there and of course, hurricane seasons around the corner. There's a concern that they lack adequate reserve from some of the plants being offline, instead trying to buttress that by holding an RFP for temporary power. Number two is, there is a total of about 925 megawatts of power today that runs on diesel that can be…

Great. Thanks, Wes. Appreciate the opportunity to talk to everybody today. First, let me start with giving a little bit more color regarding the two recent SEC filings that we submitted earlier this week. On Monday, we filed an 8-K outlining an update to the use of proceeds of the Jamaica sale, which I'll walk through shortly. And yesterday, we filed a notification of way filing under Rule 12b-25, which allows the company to file our full form 10-Q no later than Monday, the 19th. The reason for the late filing is twofold. First, we wanted to be able to announce the consummation of the sale of the Jamaica business, including describing for investors the use of proceeds. And second, with the Jamaica asset sale proceeds in hand, we can report an improved liquidity prediction and reduction of the going concern risk that was included in the 10-K. So now turning to Slide 15. We've outlined both the cash and the accounting treatment of the Jamaica transaction. On the left side of the page, we show the proceeds waterfall, and on the right side, the gain we will recognize in the second quarter. Now prior to the most recent amendment of the credit agreement, there was a requirement to use 75% of the proceeds of material asset sales to pay down super priority debt, which included the revolving credit facility, the term loans A and B and the new 2029 notes. However, we were able to negotiate an agreement with the revolving credit facility lenders to waive this asset sale proceeds waterfall in exchange for the early paydown of the September amortization payment of $270 million. In addition, we also amended the Term Loan A where we agreed to a modest pay down of $55 million, which is in line…

Thank you. [Operator Instructions]. And our first question is going to come from Gregory Lewis from BTIG.

Yes. Hi, thank you, and good afternoon, and thanks for taking my questions, everybody. Chris, I was hoping, thanks for laying out the liquidity and the cash and the injection post the Jamaica sale. I was hoping you could walk us through -- I mean, clearly, you have a lot of restricted cash on the balance sheet. Could you may be kind of point to -- is that restricted against specific projects? And what kind of hurdles are there that could free up that cash to make it unrestricted?

Hey Greg, short answer is, it's almost all related to the CapEx in Brazil. So that is restricted cash, meaning it can only be spent on the two projects that are still under construction, the CELBA power plant and the PortoCem power plant. The remainder, which is probably in the magnitude of $40 million to $50 million is restricted around kind of other credit instruments that we have inside the business, some of which will be freed up as a result of this Jamaica transaction, about $30 million of it. And the remainder would stay restricted just because, again, it's collateral for other kind of credit support enhancement -- credit enhancement on other instruments around the business.

Okay. Super helpful. And then just as we look -- as we kind of look across the cap structure at some of the debt, it's trading at a discount. You kind of alluded to maybe looking to kind of refinance that post the Jamaica transaction. But just given some of the cash on the balance sheet and kind of running the numbers, is the company looking at potentially building open market repurchases of some of that debt just to try to maybe be a little bit opportunistic?

We certainly look at the capital structure. We think that there's some significant opportunities as a result of it. I think the -- I talked about the asset level debt and maybe I should amplify that just in the -- for a second because it will help this. The capital structure that's used for liquefaction generally as people build a liquefier, they enter into a series of SPAs -- it's, for the most part, kind of a wholesaling strategy of selling gas on to others. The margin in that business is relatively low, but then the credit quality and the duration is very, very long and very, very high, so they're able to generate significant amounts of finance ability when they do so. In our case, we also have a portfolio of gas, both from our own liquefier as well as some other sources. Our overall cost of that gas is roughly Henry Hub plus $2.50. Our margin across the assets that I've list is about $4.50. So it's $500 million of financeable cash flow that's buried in our capital structure right now, that we expose that into a 20-year duration transaction and just run the numbers on it, it has got the ability to refinance a significant portion of the balance sheet, if not all of it. And so from a standing start on where we are right now, we think it's now the appropriate time to really focus on this. Obviously, there was a lot of focus on the company's part in this Jamaica sale, but that's over with. And this will be the next step of it. And I think in the context of that, the goal would be to refinance the corporate balance sheet in its entirety over the course of the next 12 months or…

No, that was super helpful. Thank you very much.

Our next question comes from Chris Robertson from Deutsche Bank.

Hey, good afternoon. Thank you for taking my questions. Wes, I was wondering if you could talk a little bit about the short-term power opportunity in Puerto Rico here. When people are bidding into the process -- is it for equipment or equipment plus fuel? And what strategy is NFE taking here in terms of are you bidding in to provide equipment or just fuel supply? Or how does that process work?

I can only relate to what I've read through the portal because it's a government-run process, so they're actually quite disciplined about how they respond to information and provide information. The rules were quite clear in that they were asking for a unitary cost of power kind of period. So you're not actually able to just simply bid in turbines. We actually asked that question specifically in the RFP questionnaire in the portal. And the two questions we ask are, were you allowed to bid in equipment versus an aggregate power price, number one. And number two, was there any minimum dispatch that we could assume that would be guaranteed to know how much power would be generated and therefore we can run the numbers on, it will be easier. And the answer to that was, no, there was no minimum. So the requirements in the RFP were quite stringent. From our standpoint, we're blessed to have a big operation on the island and so it can take advantage of the infrastructure that we have in place, but that's basically what it is. And I'd say of the three opportunities that I outlined the emergency power and the gas contract and the long-term generation, they all could be interesting under the right circumstances. But let's say, the emergency power is probably the least interesting just economically, given the relatively short duration and the lack of any kind of a commitment in terms of the utility of them, so.

Okay. Got you. As my follow-up question, maybe one for Leandro here. As it relates to CELBA, on the 18 TBtu per year, should we think about that as being more seasonally weighted in the back half of the year? Or is it kind of split across all four quarters. And then just to confirm on Slide 10 here, there's no fixed capacity payment related to that. It's just the 100% take-or-pay on the volumes?

Yes. So Chris, the power plants do have a capacity payment. It's around $25 million per year. But the biggest payment that we get is the second semester of the year, which is linkage to the production of power and linkage to the 18 TBtus of gas mentioned in the slide. So we get some payments throughout the year, but most of the payments of the plants they are due on the second semester where we need to produce power.

Okay. That's a lot more clear. Thank you for clarifying that. I'll turn it over.

Welcome.

And our next question is going to come from Wade Suki from Capital One.

Good afternoon, everyone. Appreciate you all taking my questions. Just a follow-up. I think it was on Greg's question to make sure I heard you all correctly. On asset sales, I think you originally had a goal of like $2 billion, if memory serve oftentimes fails me. But clearly, Jamaica de-risk substantially -- substantial portion of that. Anything left out here you could discuss?

You asked about other asset sales. I mean I think like the business, we have an amazing business in Brazil, as these guys have talked about, which closes a lot of opportunities for us. You have those Pacific Theater, which is another kind of business in and of itself in Nicaragua and in Mexico. But I think like absent asset sales, Wes' point of being able to do large kind of securitization type transactions would allow us to refinance our debt at a significantly cheaper rate. That's our real goal, to be honest with you, Wade.

Understood. Appreciate that. And just switching gears here a little bit, I did notice FLNG 2, not on the -- not in the presentation. Can you give us a status update there [indiscernible]?

Sure. Yes. And there hasn't been much development over the last kind of 60 days on FLNG number 2. I mean, still under construction in the Kiewit yard. We have been focused obviously on the closing of the Jamaica transaction and on the refinancing of the business in order to ensure that we have ample liquidity and altitude, so to speak, in the day-to-day operations. We love the project. We're still engaged on it with the people in Corpus and in Mexico, and we'll be providing additional updates as we make more material construction progress.

Great. And Nicaragua?

I'm sorry.

Nicaragua.

Nicaragua, just hoping to get an update there. Thank you.

Yes. Nicaragua, we are in the final stages of restructuring our PPA with the government. We had a lot of productive thoughts about that. And basically, what we're trying to do is to create a structure that looks most similar to the CELBA in new Puerto Rico, long-term gas contracts. So there's basically a capacity payment that is designed to cover expenses. And then the marginal gas cost that we think reflects kind of the value of the credit. So if you think about it, Norsk Hydro, which is an investment-grade credit, is Henry Hub plus $6, the CFD which is a BBB- credit is Henry Hub plus $7.45, so we want to be a modest premium to that to reflect the -- so lower credit quality for Nicaragua. So I think once we get the final agreement on the contract, then we'll finish up what remaining work we've got the power plant itself is virtually 100% built the terminal, needs a little bit more time and effort, but we're very, very close to the end. So we just need to finalize our agreement to move ahead on that.

Great. Thank you so much. I'll go back into the queue.

And our next question is going to come from Craig Shere from Tuohy Brothers.

Hi, thanks for taking the questions. On Slide 7, I mean, obviously, we're not getting the Plaquemines and especially CP2 volumes anytime soon. What are your thoughts about bridging LNG supply needs between now and commencement of the Venture Global SPAs?

We're actually very well-positioned right now because we've got the volumes from FLNG. Right now, the asset is producing basically right at nameplate capacity at the cold box. We are planning an outage here in a couple of weeks that we think is going to significantly improve from that level. So it's already performing very consistently and reliably and at a good level. We think there's a significant amount of upside with the planned outage and debottlenecking activity of it. So that's 90 TBtus is our estimate of where that will end up with. With the volumes that we have in place that are needed in Brazil is really just the Norsk Hydro this year in the second half of next year, then it becomes the CELBA plant. Puerto Rico, the large gas contracts we signed earlier this year is slated to come on in 2028. So as we look across the portfolio, it's actually quite balanced overall in terms of the needs, kind of step-by-step. And if we add to those lines because we're successful in either Brazil or Puerto Rico or elsewhere, we can always then add any volumes to address that. But we've got a net position that is $2.15 versus the long-term of $1.09. Obviously, there's some short-term volumes in there that, that could be displaced if we're successful in some of these longer-term things. But we're in a very good position in terms of our gas needs and our gas used at the time. So it's actually -- it works well for the timing of these future developments.

Got you. And you've been talking for a number of months or quarters about the significant opportunities with both the Puerto Rico RFP and Brazil capacity auction into June and second half this year. Obviously, you have some competitive infrastructure advantages. Do you believe some of the noise around liquidity and balance sheet could impact any of the decision-making there by regulators? Or do you think that given your entrenched position and the obvious virtual cycle of favorable awards on the whole business just kind of makes that a moot point?

Well, I think that we have a very viable business. We have $1 billion on balance sheet. We've got significant assets that are not only very expensive to build, but are also very time consuming to build. So we feel like we've kind of earned our competitive position in these countries, the hard way. We actually have set out years ago to build the essential infrastructure to get it into there. I mean that said, in no case, are we a monopoly. We don't want to be a monopoly. We're not regulated like monopoly. That's not what we aspire to be. In Puerto Rico itself, I think today, we actually provide less than 50% of the fuels that is provided on the island. So EcoElectrica in the South has significant gas abilities. We've got a very, very good position in San Juan, that's by design. And we spent hundreds of millions of dollars developing our product there like anybody else could do or could have done to give ourselves that position. But in no respect are we monopolistic about this. We think we're well-positioned. And what we have predicted to happen in these countries, we think is largely coming true. I mean like we're certainly disappointed that the auctions in Brazil were delayed, but there was reasons for that are out of our control. And as Leandro said, the needs of the country having gotten less. They've gotten greater during that period. So we feel great about those auctions. And we've got a great, great asset in the South that we think is going to play a central role in those auctions when they do come. And in Puerto Rico, with the -- both the short-term and long-term generation needed, we think that having gas in San Juan is going…

Great. Thank you.

And our last question will come from Tarek Hamid from JPMorgan.

Hey, good afternoon. Could you guys maybe help us bridge through the liquidity picture a little bit, particularly sort of how you're thinking about gross CapEx needs for the remainder of the year. Obviously, you have a bunch of restricted cash as well as liquidity outlined, but just would love to understand sort of how much is yet to go out the door?

Yes. So I'd say -- we'll start in Brazil. So the remainder of the CapEx for CELBA and PortoCem is fully funded with cash on the balance sheet on the restricted cash line. So that's paid for. And that will be paced this year and through the first kind of 6-ish, maybe nine months in total because you'll have some lag in the payments beyond COD in 2026 for PortoCem. Beyond PortoCem, you have very little remaining CapEx to spend. Obviously, FLNG 1 has been placed into service. You have no more spend in Mexico or in -- really in Puerto Rico until you get conversions and those conversions, whatever CapEx is needed for those conversions we envision would be paid for by PREPA. That really then leaves you with Nicaragua, and we've disclosed this before, it's about -- remaining to spend in Nicaragua is about $50 million to $60 million. And then the rest is FLNG 2. I would say that FLNG 2, the pacing -- we have the control on that, on how that goes out. And as I mentioned a moment ago, our intention is to be very disciplined with cash at the moment, so that we can ensure that we are solving all near-term maturities. And as we have those in hand or we do refinancings, as Wes just discussed, we would then -- we would move forward in greater pace on the FLNG 2 CapEx development.

Thank you. And then it was very helpful when you guys walked through the covenant amendments on the revolver and the Term Loan A, but is it fair to assume that through the asset to language on the 12 and the Term Loan B likely don't apply given the amount of capital you're spending?

I'm not sure I understood the question. You're talking about like the reinvestment rates?

Yes. Well, in terms of you're -- having to prepay those without sale proceeds?

Well, we aren't using asset sale proceeds to repay those. We have cash on the balance sheet and cash flows from our operations that we can use to refinance if we want the -- or to pay off any of the other instruments.

Okay, fair enough. Thank you very much.

And there are no further questions in the queue.

Great. Okay. Thank you very much, everyone. We look forward to talking to you next quarter. Thank you.

Thank you.

And this concludes today's call. Thank you for your participation. You may now disconnect.