☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 83-1482060 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
111 W. 19th Street, 8th Floor New York, NY | 10011 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered on which registered |
Class A shares, representing limited liability company interests | NFE | NASDAQ Global Select Market |
Large accelerated filer ☐ | Accelerated filer ☒ |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
Emerging growth company ☒ |
1 | |||
2 | |||
3 | |||
Items 1 and 2. | 3 | ||
Item 1A. | 15 | ||
Item 1B. | 45 | ||
Item 3. | 45 | ||
Item 4. | 45 | ||
46 | |||
Item 5. | 46 | ||
Item 6. | 47 | ||
Item 7. | 49 | ||
Item 7A. | 60 | ||
Item 8. | 60 | ||
Item 9. | 60 | ||
Item 9A. | 60 | ||
Item 9B. | 61 | ||
62 | |||
Item 10. | 62 | ||
Item 11. | 62 | ||
Item 12. | 62 | ||
Item 13. | 62 | ||
Item 14. | 62 | ||
63 | |||
Item 15. | 63 | ||
Item 16 | 65 | ||
66 |
ADO | automotive diesel oil |
Bcf/yr | billion cubic feet per year |
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 |
DOT | U.S. Department of Transportation |
EPA | U.S. Environmental Protection Agency |
FTA countries | countries with which the United States has a free trade agreement providing for national treatment for trade in natural gas |
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 |
mtpa | million tons per annum |
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, facilities, power plants or Liquefaction Facilities 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, facilities, 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; |
• | 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; |
• | 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; |
• | 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; and |
• | risks related to the jurisdictions in which we do, or seek to do, business, particularly Florida, Jamaica, Puerto Rico, Angola, Nicaragua and other jurisdictions in the Caribbean. |
• | large, multinational and national companies with longer operating histories, more development experience, greater name recognition, larger staffs and substantially greater financial, technical and marketing resources; |
• | oil and gas producers who sell or control LNG derived from their international oil and gas properties; and |
• | purchasers located in other countries where prevailing market prices can be substantially different from those in the United States. |
• | 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 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; |
• | public health crises, such as the coronavirus outbreak beginning in early 2020, which could impact global economic conditions |
• | 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; |
• | existing and future governmental laws and regulations; or |
• | 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.”). |
• | 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, which may 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; |
• | 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; |
• | 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; |
• | 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. |
In addition, New Fortress Energy Holdings may have different tax positions from us that could influence its decisions regarding whether and when to support the disposition of assets and the incurrence or refinancing of new or existing indebtedness. In addition, the determination of future tax reporting positions, the structuring of future transactions and the handling of any challenge by any taxing authority to our tax reporting positions may take into consideration New Fortress Energy Holdings’ tax or other considerations, which may differ from the considerations of NFE or our other shareholders.
• | 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 any action by shareholders to be taken only at an annual meeting or special meeting rather than by a written consent of the shareholders, subject to the rights of any series of preferred shares with respect to such rights; |
• | permitting special meetings of our shareholders to be called only by our board of directors pursuant to a resolution adopted by the affirmative vote of a majority of the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships; |
• | 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 operating agreement. |
![](https://capedge.com/proxy/10-K/0001140361-20-004834/image00005.jpg)
Cumulative Total Return Percentage | |||||
Company / Index | January 2019(1) | March 2019(1) | June 2019(1) | September 2019(1) | December 2019(1) |
NFE | 100 | 89 | 90 | 138 | 120 |
S&P 500 | 100 | 105 | 110 | 112 | 122 |
Alerian Midstream Index (“AMNA”) | 100 | 105 | 107 | 105 | 107 |
Vanguard Energy ETF (“VDE”) | 100 | 105 | 100 | 93 | 98 |
(1) | Last trading day of the month |
Year Ended December 31, | ||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||
(In thousands, except share and per share amounts) | ||||||||||||||||
Statements of Operations Data: | ||||||||||||||||
Revenues | ||||||||||||||||
Operating revenue | $ | 145,500 | $ | 96,906 | $ | 82,104 | $ | 18,615 | ||||||||
Other revenue | 43,625 | 15,395 | 15,158 | 2,780 | ||||||||||||
Total revenues | 189,125 | 112,301 | 97,262 | 21,395 | ||||||||||||
Operating expenses | ||||||||||||||||
Cost of sales | 183,359 | 95,742 | 78,692 | 22,747 | ||||||||||||
Operations and maintenance | 26,899 | 9,589 | 7,456 | 5,205 | ||||||||||||
Selling, general and administrative | 152,922 | 62,137 | 33,343 | 18,160 | ||||||||||||
Loss on mitigation sales | 5,280 | - | - | - | ||||||||||||
Depreciation and amortization | 7,940 | 3,321 | 2,761 | 2,341 | ||||||||||||
Total operating expenses | 376,400 | 170,789 | 122,252 | 48,453 | ||||||||||||
Operating loss | (187,275 | ) | (58,488 | ) | (24,990 | ) | (27,058 | ) | ||||||||
Interest expense | 19,412 | 11,248 | 6,456 | 5,105 | ||||||||||||
Other income, net | (2,807 | ) | (784 | ) | (301 | ) | (53 | ) | ||||||||
Loss on extinguishment of debt, net | - | 9,568 | - | 1,177 | ||||||||||||
Loss before taxes | (203,880 | ) | (78,520 | ) | (31,145 | ) | (33,287 | ) | ||||||||
Tax expense (benefit) | 439 | (338 | ) | 526 | (361 | ) | ||||||||||
Net loss | (204,319 | ) | (78,182 | ) | (31,671 | ) | (32,926 | ) | ||||||||
Net loss attributable to non-controlling interest | 170,510 | 106 | - | - | ||||||||||||
Net loss atrributable to stockholders | $ | (33,809 | ) | $ | (78,076 | ) | $ | (31,671 | ) | $ | (32,926 | ) | ||||
Net loss per share - basic and diluted | $ | (1.62 | ) | |||||||||||||
Weighted average number of shares outstanding - basic and diluted | 20,862,555 |
As of December 31, | ||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||
Balance Sheet Data (at period end): | ||||||||||||||||
Property, plant and equipment, net | $ | 192,222 | $ | 94,040 | $ | 69,350 | $ | 70,633 | ||||||||
Construction in progress | 466,587 | 254,700 | 35,413 | 4,668 | ||||||||||||
Total assets | 1,123,814 | 699,402 | 381,190 | 389,054 | ||||||||||||
Long-term debt (includes current portion) | 619,057 | 272,192 | 75,253 | 80,385 | ||||||||||||
Total liabilities | 736,490 | 416,755 | 102,280 | 99,684 |
Year Ended December 31, | ||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||
Statements of Cash Flow Data: | ||||||||||||||||
Net cash provided by (used in): | ||||||||||||||||
Operating activities | $ | (234,261 | ) | $ | (93,227 | ) | $ | (54,892 | ) | $ | (43,493 | ) | ||||
Investing activities | (376,164 | ) | (184,455 | ) | (29,858 | ) | (98,325 | ) | ||||||||
Financing activities | 602,607 | 260,204 | 13,960 | 275,936 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | Change | ||||||||||
Revenues | ||||||||||||
Operating revenue | $ | 145,500 | $ | 96,906 | $ | 48,594 | ||||||
Other revenue | 43,625 | 15,395 | 28,230 | |||||||||
Total revenues | 189,125 | 112,301 | 76,824 | |||||||||
Operating expenses | ||||||||||||
Cost of sales | 183,359 | 95,742 | 87,617 | |||||||||
Operations and maintenance | 26,899 | 9,589 | 17,310 | |||||||||
Selling, general and administrative | 152,922 | 62,137 | 90,785 | |||||||||
Loss on mitigation sales | 5,280 | - | 5,280 | |||||||||
Depreciation and amortization | 7,940 | 3,321 | 4,619 | |||||||||
Total operating expenses | 376,400 | 170,789 | 205,611 | |||||||||
Operating loss | (187,275 | ) | (58,488 | ) | (128,787 | ) | ||||||
Interest expense | 19,412 | 11,248 | 8,164 | |||||||||
Other income, net | (2,807 | ) | (784 | ) | (2,023 | ) | ||||||
Loss on extinguishment of debt | - | 9,568 | (9,568 | ) | ||||||||
Loss before taxes | (203,880 | ) | (78,520 | ) | (125,360 | ) | ||||||
Tax expense (benefit) | 439 | (338 | ) | 777 | ||||||||
Net loss | $ | (204,319 | ) | $ | (78,182 | ) | $ | (126,137 | ) |
• | Our historical financial results do not include significant projects that are near completion. Our historical financial statements only include our Montego Bay Terminal, Miami Facility, and certain industrial end-users. The Old Harbour Terminal commenced commercial operations during 2019, and a significant downstream customer of the Old Harbour Terminal, the Old Harbour Power Plant, is expected to be fully operational in 2020. As such, we expect this customer to purchase significant volumes on a take-or-pay basis from the Old Harbour Terminal throughout 2020 and future years. We also expect that the CHP Plant and the San Juan Facility will be fully operational beginning in 2020, and we expect to generate significant revenue from customers of these facilities under long-term contracts beginning in 2020. Our current results also do not include revenue and operating results from other projects under development including the La Paz Terminal, the LNG regasification terminal and power plant in Puerto Sandino, Nicaragua (the “Puerto Sandino Terminal”), the LNG terminal in Angola (the “Angola Terminal”), and the LNG terminal on the Shannon Estuary near Ballylongford, Ireland (the “Ireland Terminal”). |
• | Our historical financial results do not reflect the long term LNG supply agreement that will lower the cost of our LNG supply from 2022 to 2030. We currently purchase the majority of our supply of LNG from third parties. For the years ended December 31, 2019 and 2018, we sourced 93% and 91%, respectively, of our LNG volumes from third parties. Our cost of sales for the year-ended December 31, 2019 reflected an average cost of LNG purchased from third parties of $0.73 per gallon ($8.81 per MMBtu), predominately purchased under a firm purchase commitment entered into in December 2018. During 2019, the market price for LNG dropped significantly, and we have executed a firm commitment to purchase 27.5 TBtus annually beginning in 2022 at prices that are expected to be significantly lower than inventory purchased in 2019. Further, we believe that we will take advantage of the current market pricing for LNG to supply our expanding operations, resulting in an overall lower average cost of LNG in future periods. |
• | We continue to incur incremental selling, general and administrative expenses related to our transition to a publicly traded company. We completed our IPO on February 4, 2019, and throughout 2019 we have incurred direct, incremental general and administrative expenses as a result of being a publicly traded company, including costs associated with the employment of additional personnel, compliance with Securities and Exchange Commission rules and regulations, annual and quarterly reports to our common shareholders, registrar and transfer agent fees, national stock exchange fees, audit fees, incremental director and officer liability insurance costs, and director and officer compensation. |
Year Ended December 31, | ||||||||||||
(in thousands) | 2019 | 2018 | Change | |||||||||
Cash flows from: | ||||||||||||
Operating activities | $ | (234,261 | ) | $ | (93,227 | ) | $ | (141,034 | ) | |||
Investing activities | (376,164 | ) | (184,455 | ) | (191,709 | ) | ||||||
Financing activities | 602,607 | 260,204 | 342,403 | |||||||||
Net (decrease) in cash, cash equivalents, and restricted cash | $ | (7,818 | ) | $ | (17,478 | ) | $ | 9,660 |
(in thousands) | Total | Less than 1 year | Years 2 to 3 | Years 4 to 5 | More than 5 years | |||||||||||||||
Long-term debt obligations | $ | 893,308 | $ | 512,262 | $ | 32,103 | $ | 32,103 | $ | 316,840 | ||||||||||
Purchase obligations | 541,375 | 285,618 | 237,290 | 12,629 | 5,838 | |||||||||||||||
Operating lease obligations | 132,333 | 37,776 | 53,865 | 14,234 | 26,458 | |||||||||||||||
Total | $ | 1,567,016 | $ | 835,656 | $ | 323,258 | $ | 58,966 | $ | 349,136 |
(a)(1) | Financial Statements. |
(2) | Financial Statement Schedules. |
(b) | 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 Commission 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 Commission 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 Commission on February 5, 2019) | ||
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 | ||
Contribution Agreement, dated February 4, 2019, by and among New Fortress Energy LLC, New Fortress Intermediate LLC, New Fortress Energy Holdings LLC, NFE Atlantic 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 Commission on February 5, 2019) | ||
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 Commission 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 Commission 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 Commission on December 24, 2018) | ||
Offer Letter, dated March 14, 2017, by and between NFE Management LLC and Christopher Guinta (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-228339), filed with the Commission on January 14, 2019) | ||
Offer Letter, dated August 30, 2018, by and between NFE Management LLC and Michael J. Utsler (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement ono Form S-1/A (File No. 333-228339), filed with the Commission on January 14, 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 Commission 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 Commission on February 5, 2019) |
Exhibit Number | Description | |
Credit Agreement, dated August 15, 2018, by and between New Fortress Energy Holdings LLC, NFE Atlantic Holdings LLC, as borrower, Morgan Stanley Senior Funding, Inc., as administrative agent and the subsidiary guarantors and lenders parties thereto (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1 (File No. 333-228339), filed with the Commission on November 9, 2018) | ||
Gas Sales Agreement, dated August 5, 2015, by and between New Fortress Energy LLC and Jamaica Public Service Company Limited (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1 (File No. 333-228339), filed with the Commission on November 9, 2018) | ||
First Amendment to Gas Sales Agreement, dated May 23, 2016, by and between NFE North Holdings Limited and Jamaica Public Service Company Limited (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 (File No. 333-228339), filed with the Commission on November 9, 2018) | ||
Indemnification Agreement (Edens) (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K (File No. 001-38790), filed with the Commission 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 Commission on February 5, 2019) | ||
Indemnification Agreement (Utsler) (incorporated by reference to Exhibit 10.6 to the Registrant’s Form 8-K (File No. 001-38790), filed with the Commission 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 Commission 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 Commission 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 Commission 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 Commission 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 Commission 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 Commission 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 Commission on February 5, 2019) | ||
Amendment Agreement to Credit Agreement, dated December 31, 2018, by and among New Fortress Energy Holdings LLC, NFE Atlantic Holdings LLC, as the borrower, Morgan Stanley Senior Funding, Inc., as administrative agent and the subsidiary guarantors and lenders parties thereto (incorporated by reference to Exhibit 10.15 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-228339), filed with the Commission on January 14, 2019) | ||
Amendment Agreement, dated as of 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 Form 10-K (File No. 001-38790), filed with the Commission 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 Form 10-K (File No. 001-38790), filed with the Commission on March 26, 2019) |
Exhibit Number | Description | |
Master LNG Sale and Purchase Agreement, dated December 20, 2016, by and between Centrica LNG Company Limited and NFE North Trading Limited (incorporated by reference to Exhibit 10.16 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-228339), filed with the Commission on January 14, 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 Commission 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 (File 001-38790), filed with the Commission on March 26, 2019) | ||
Credit Agreement, dated January 10, 2020, by and among New Fortress Intermediate LLC, NFE Atlantic Holdings LLC, each person listed as a guarantor on the signature pages thereto, the lenders from time to time party thereto and Cortland Capital Market Services LLC, as collateral agent and administrative agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K (File No. 001-38790), filed with the Commission on January 13, 2020) | ||
Third Amendment Agreement, dated as of September 2, 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 and March 13, 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 10.1 to the Registrant’s Form 8-K (File No. 001-38790), filed with the Commission on September 6, 2019) | ||
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) | ||
10.31*† | Separation Agreement, dated as of November 25, 2019, between NFE Management LLC and Michael J. Utsler | |
List of Subsidiaries of New Fortress Energy LLC | ||
Consent of Ernst & Young L.L.P. | ||
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. | ||
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 |
* | Filed as an exhibit to this Annual Report |
** | Furnished as an exhibit to this Annual Report |
† | Compensatory plan or arrangement |
‡ | Confidential treatment was granted with respect to certain portions of this exhibit. Omitted portions filed separately with the SEC. |
NEW FORTRESS ENERGY LLC | ||
Date: March 4, 2020 | ||
By: | /s/ Christopher S. Guinta | |
Name: | Christopher S. Guinta | |
Title: | Chief Financial Officer |
Name | Title | Date | ||
/s/ Wesley R. Edens | Chief Executive Officer and Chairman (Principal Executive Officer) | March 4, 2020 | ||
Wesley R. Edens | ||||
/s/ Christopher S. Guinta | Chief Financial Officer (Principal Financial Officer) | March 4, 2020 | ||
Christopher S. Guinta | ||||
/s/ Yunyoung Shin | Chief Accounting Officer (Principal Accounting Officer) | March 4, 2020 | ||
Yunyoung Shin | ||||
/s/ Randal A. Nardone | Director | March 4, 2020 | ||
Randal A. Nardone | ||||
/s/ C. William Griffin | Director | March 4, 2020 | ||
C. William Griffin | ||||
/s/ John J. Mack | Director | March 4, 2020 | ||
John J. Mack | ||||
/s/ Matthew Wilkinson | Director | March 4, 2020 | ||
Matthew Wilkinson | ||||
/s/ David J. Grain | Director | March 4, 2020 | ||
David J. Grain | ||||
/s/ Desmond Iain Catterall | Director | March 4, 2020 | ||
Desmond Iain Catterall | ||||
/s/ Katherine E. Wanner | Director | March 4, 2020 | ||
Katherine E. Wanner |
Page | |
F-2 | |
F-3 | |
F-4 | |
F-5 | |
F-6 | |
F-7 |
March 4, 2020
December 31, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 27,098 | $ | 78,301 | ||||
Restricted cash | 30,966 | 30 | ||||||
Receivables, net of allowances of $0 and $257, respectively | 49,890 | 28,530 | ||||||
Inventory | 63,432 | 15,959 | ||||||
Finance leases, net | 1,082 | 943 | ||||||
Prepaid expenses and other current assets | 38,652 | 30,017 | ||||||
Total current assets | 211,120 | 153,780 | ||||||
Restricted cash | 34,971 | 22,522 | ||||||
Construction in progress | 466,587 | 254,700 | ||||||
Property, plant and equipment, net | 192,222 | 94,040 | ||||||
Finance leases, net | 91,174 | 92,207 | ||||||
Intangibles, net | 43,540 | 43,057 | ||||||
Investment in equity securities | 2,540 | 3,656 | ||||||
Deferred tax asset, net | 34 | 185 | ||||||
Other non-current assets | 81,626 | 35,255 | ||||||
Total assets | $ | 1,123,814 | $ | 699,402 | ||||
Liabilities | ||||||||
Current liabilities | ||||||||
Term loan facility | $ | - | $ | 272,192 | ||||
Accounts payable | 11,593 | 43,177 | ||||||
Accrued liabilities | 54,943 | 67,512 | ||||||
Due to affiliates | 10,252 | 4,481 | ||||||
Other current liabilities | 25,475 | 17,393 | ||||||
Total current liabilities | 102,263 | 404,755 | ||||||
Long-term debt | 619,057 | - | ||||||
Deferred tax liability, net | 241 | - | ||||||
Other long-term liabilities | 14,929 | 12,000 | ||||||
Total liabilities | 736,490 | 416,755 | ||||||
Commitments and contingences (Note 19) | ||||||||
Stockholders’ equity | ||||||||
Members’ capital, no par value, 500,000,000 shares authorized, 67,983,095 shares issued and outstanding as of December 31, 2018 | - | 426,741 | ||||||
Class A shares, 23,607,096 shares, issued and outstanding as of December 31, 2019; 0 shares issued and outstanding as of December 31, 2018 | 130,658 | - | ||||||
Class B shares, 144,342,572 shares, issued and outstanding as of December 31, 2019; 0 shares issued and outstanding as of December 31, 2018 | - | - | ||||||
Accumulated deficit | (45,823 | ) | (158,423 | ) | ||||
Accumulated other comprehensive loss | (30 | ) | (11 | ) | ||||
Total stockholders’ equity attributable to NFE | 84,805 | 268,307 | ||||||
Non-controlling interest | 302,519 | 14,340 | ||||||
Total stockholders’ equity | 387,324 | 282,647 | ||||||
Total liabilities and stockholders’ equity | $ | 1,123,814 | $ | 699,402 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Revenues | ||||||||||||
Operating revenue | $ | 145,500 | $ | 96,906 | $ | 82,104 | ||||||
Other revenue | 43,625 | 15,395 | 15,158 | |||||||||
Total revenues | 189,125 | 112,301 | 97,262 | |||||||||
Operating expenses | ||||||||||||
Cost of sales | 183,359 | 95,742 | 78,692 | |||||||||
Operations and maintenance | 26,899 | 9,589 | 7,456 | |||||||||
Selling, general and administrative | 152,922 | 62,137 | 33,343 | |||||||||
Loss on mitigation sales | 5,280 | - | - | |||||||||
Depreciation and amortization | 7,940 | 3,321 | 2,761 | |||||||||
Total operating expenses | 376,400 | 170,789 | 122,252 | |||||||||
Operating loss | (187,275 | ) | (58,488 | ) | (24,990 | ) | ||||||
Interest expense | 19,412 | 11,248 | 6,456 | |||||||||
Other income, net | (2,807 | ) | (784 | ) | (301 | ) | ||||||
Loss on extinguishment of debt, net | - | 9,568 | - | |||||||||
Loss before taxes | (203,880 | ) | (78,520 | ) | (31,145 | ) | ||||||
Tax expense (benefit) | 439 | (338 | ) | 526 | ||||||||
Net loss | (204,319 | ) | (78,182 | ) | (31,671 | ) | ||||||
Net loss attributable to non-controlling interest | 170,510 | 106 | - | |||||||||
Net loss attributable to stockholders | $ | (33,809 | ) | $ | (78,076 | ) | $ | (31,671 | ) | |||
Net loss per share – basic and diluted | $ | (1.62 | ) | |||||||||
Weighted average number of shares outstanding – basic and diluted | 20,862,555 | |||||||||||
Other comprehensive loss: | ||||||||||||
Net loss | $ | (204,319 | ) | $ | (78,182 | ) | $ | (31,671 | ) | |||
Unrealized loss on currency translation adjustment | 219 | - | - | |||||||||
Unrealized loss (gain) on available-for-sale investment | - | 2,677 | (1,303 | ) | ||||||||
Comprehensive loss | (204,538 | ) | (80,859 | ) | (30,368 | ) | ||||||
Comprehensive loss attributable to non-controlling interest | 170,699 | 106 | - | |||||||||
Comprehensive loss attributable to stockholders | $ | (33,839 | ) | $ | (80,753 | ) | $ | (30,368 | ) |
Members’ Capital | Class A shares | Class B shares | Stock subscription receivable | Accumulated deficit | Accumulated other comprehensive (loss) income | Non-controlling Interest | Total stockholders’ equity | |||||||||||||||||||||||||||||||||||||
Units | Amounts | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2017 | 65,000,000 | $ | 336,683 | - | $ | - | - | $ | - | $ | - | $ | (48,676 | ) | $ | 1,363 | $ | - | $ | 289,370 | ||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (31,671 | ) | - | - | (31,671 | ) | |||||||||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | - | - | - | - | 1,303 | - | 1,303 | |||||||||||||||||||||||||||||||||
Capital contributions | 2,317,252 | 70,100 | - | - | - | - | - | - | - | - | 70,100 | |||||||||||||||||||||||||||||||||
Cost of issuing capital | - | (192 | ) | - | - | - | - | - | - | - | - | (192 | ) | |||||||||||||||||||||||||||||||
Stock subscription receivable | (1,652,215 | ) | - | - | - | - | - | (50,000 | ) | - | - | - | (50,000 | ) | ||||||||||||||||||||||||||||||
Balance as of December 31, 2017 | 65,665,037 | 406,591 | - | - | - | - | (50,000 | ) | (80,347 | ) | 2,666 | - | 278,910 | |||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (78,076 | ) | - | (106 | ) | (78,182 | ) | ||||||||||||||||||||||||||||||
Other comprehensive (loss) | - | - | - | - | - | - | - | - | (2,677 | ) | - | (2,677 | ) | |||||||||||||||||||||||||||||||
Capital contributions | 665,843 | 20,150 | - | - | - | - | - | - | - | - | 20,150 | |||||||||||||||||||||||||||||||||
Stock subscription receivable | 1,652,215 | - | - | - | - | - | 50,000 | - | - | - | 50,000 | |||||||||||||||||||||||||||||||||
Acquisition of Shannon LNG | - | - | - | - | - | - | - | - | - | 14,446 | 14,446 | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | 67,983,095 | 426,741 | - | - | - | - | - | (158,423 | ) | (11 | ) | 14,340 | 282,647 | |||||||||||||||||||||||||||||||
Activity prior to the IPO and related organizational transactions: | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (7,923 | ) | 11 | (91 | ) | (8,003 | ) | ||||||||||||||||||||||||||||||
Effects of the IPO and related organizational transactions: | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A shares in the IPO, net of underwriting discount and offering costs | - | - | 20,837,272 | 32,136 | - | - | - | - | - | 235,874 | 268,010 | |||||||||||||||||||||||||||||||||
Effects of the reorganization transactions | (67,983,095 | ) | (426,741 | ) | - | 51,092 | 147,058,824 | - | - | 146,420 | - | 229,229 | - | |||||||||||||||||||||||||||||||
Activity subsequent to the IPO and related organizational transactions: | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (25,897 | ) | - | (170,419 | ) | (196,316 | ) | ||||||||||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | - | - | - | (30 | ) | (189 | ) | (219 | ) | ||||||||||||||||||||||||||||||
Share-based compensation expense | - | - | - | 41,205 | - | - | - | - | - | - | 41,205 | |||||||||||||||||||||||||||||||||
Exchange of NFI Units | - | - | 2,716,252 | 6,225 | (2,716,252 | ) | - | - | - | - | (6,225 | ) | - | |||||||||||||||||||||||||||||||
Issuance of shares for vested RSUs | - | - | 53,572 | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | | - | $ | - | 23,607,096 | $ | 130,658 | 144,342,572 | $ | - | $ | - | $ | (45,823 | ) | $ | (30 | ) | $ | 302,519 | $ | 387,324 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net loss | $ | (204,319 | ) | $ | (78,182 | ) | $ | (31,671 | ) | |||
Adjustments for: | ||||||||||||
Amortization of deferred financing costs | 5,873 | 4,023 | 696 | |||||||||
Depreciation and amortization | 8,641 | 4,034 | 3,214 | |||||||||
Loss on extinguishment of debt, net | - | 3,188 | - | |||||||||
Deferred taxes | 392 | (345 | ) | 521 | ||||||||
Change in value of investment in equity securities | 1,116 | - | - | |||||||||
Share-based compensation | 41,205 | - | - | |||||||||
Loss on mitigation sales | 2,622 | - | - | |||||||||
Other | 131 | 439 | 1,342 | |||||||||
(Increase) in receivables | (19,754 | ) | (9,516 | ) | (3,114 | ) | ||||||
(Increase) in inventories | (50,345 | ) | (4,807 | ) | (3,496 | ) | ||||||
(Increase) in other assets | (39,344 | ) | (28,338 | ) | (21,738 | ) | ||||||
Increase (Decrease) in accounts payable/accrued liabilities | 3,036 | 12,232 | (110 | ) | ||||||||
Increase in amounts due to affiliates | 5,771 | 2,390 | 894 | |||||||||
Increase (Decrease) in other liabilities | 10,714 | 1,655 | (1,430 | ) | ||||||||
Net cash used in operating activities | (234,261 | ) | (93,227 | ) | (54,892 | ) | ||||||
Cash flows from investing activities | ||||||||||||
Purchase of investment in equity securities | - | - | (1,667 | ) | ||||||||
Capital expenditures | (377,051 | ) | (181,151 | ) | (28,727 | ) | ||||||
Principal payments received on finance lease, net | 887 | 724 | 536 | |||||||||
Acquisition of consolidated subsidiary | - | (4,028 | ) | - | ||||||||
Net cash used in investing activities | (376,164 | ) | (184,455 | ) | (29,858 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Proceeds from borrowings of debt | 347,856 | 280,600 | - | |||||||||
Payment of deferred financing costs | (8,259 | ) | (14,026 | ) | - | |||||||
Repayment of debt | (5,000 | ) | (76,520 | ) | (5,828 | ) | ||||||
Proceeds from IPO | 274,948 | - | - | |||||||||
Repayment of affiliate note | - | - | (120 | ) | ||||||||
Capital contributed from Members | - | 20,150 | 20,100 | |||||||||
Payment of stock issuance costs | (6,938 | ) | - | (192 | ) | |||||||
Collection of subscription receivable | - | 50,000 | - | |||||||||
Net cash provided by financing activities | 602,607 | 260,204 | 13,960 | |||||||||
Net (decrease) in cash, cash equivalents and restricted cash | (7,818 | ) | (17,478 | ) | (70,790 | ) | ||||||
Cash, cash equivalents and restricted cash – beginning of period | 100,853 | 118,331 | 189,121 | |||||||||
Cash, cash equivalents and restricted cash – end of period | $ | 93,035 | $ | 100,853 | $ | 118,331 | ||||||
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 | $ | (48,150 | ) | $ | 74,280 | $ | 7,997 | |||||
Cash paid for interest, net of capitalized interest | 6,765 | 7,515 | 5,725 | |||||||||
Cash paid for taxes | 28 | - | 5 |
2. | Significant accounting policies |
(a) | Basis of presentation and principles of consolidation |
(b) | Use of estimates |
(c) | Foreign currencies |
(d) | Cash and cash equivalents |
(e) | Restricted cash |
(f) | Receivables |
(g) | Inventories |
(h) | Construction in progress |
(i) | Property, plant and equipment, net |
Useful life (Yrs) | ||||
LNG liquefaction facilities | 20-30 | |||
Gas terminals | 5-45 | |||
Gas pipelines | 4-45 | |||
ISO containers and other equipment | 3-40 | |||
Leasehold improvements | 5-27 |
(j) | Asset retirement obligations (“AROs”) |
(k) | Impairment of long-lived assets |
(l) | Investment in equity securities |
(m) | Intangible assets |
(n) | Long-term debt and debt issuance costs |
(o) | Legal and contingencies |
(p) | Revenue recognition |
(q) | Loss on mitigation sales |
(r) | Leases, as lessee |
(s) | Share-based compensation |
(t) | Taxation |
(u) | Net loss per share |
3. | Adoption of new and revised standards |
(a) | New standards, amendments, and interpretations issued but not effective for the financial year beginning January 1, 2019: |
(b) | New and amended standards adopted by the Company: |
4. | Revenue from contracts with customers |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Other Revenue | ||||||||||||
Development services revenue | $ | 27,308 | $ | - | $ | - | ||||||
Lease related revenue | 16,317 | 15,395 | 15,158 | |||||||||
Total other revenue | $ | 43,625 | $ | 15,395 | $ | 15,158 |
Period | Revenue | |||
2020 | $ | 185,272 | ||
2021 | 170,494 | |||
2022 | 168,960 | |||
2023 | 168,202 | |||
2024 | 167,445 | |||
Thereafter | 2,240,812 | |||
Total | $ | 3,101,185 |
5. | Acquisition |
November 9, 2018 | ||||
Cash(1) | $ | 3,435 | ||
Contingent consideration(2) | 9,835 | |||
Equity Agreement(3) | 16,924 | |||
Transaction costs | 593 | |||
Non-controlling interest | 14,446 | |||
Total consideration | $ | 45,233 |
(1) | Cash inclusive of repayment of Shannon LNG’s liabilities equal to approximately $2,857. |
(2) | Consideration due to sellers once the first gas is exported from the terminal to be built. |
(3) | To be paid in shares at the earlier of agreed-upon date in 2020 or the commencement of significant construction activities specified in the Shannon LNG Agreement. |
November 9, 2018 | Useful life (Yrs) | |||||||
Assets | ||||||||
Land | $ | 851 | Indefinite life | |||||
Rights of way | 1,191 | Indefinite life | ||||||
Intangible assets – favorable lease agreements | 244 | 91 | ||||||
Intangible assets – permits | 42,947 | 40 | ||||||
Total assets acquired | $ | 45,233 |
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 the 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). |
December 31, 2019 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Valuation technique | |||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 27,098 | $ | - | $ | - | $ | 27,098 | Market approach | ||||||||
Restricted cash | 65,937 | - | - | 65,937 | Market approach | ||||||||||||
Investment in equity securities | 2,540 | - | - | 2,540 | Market approach | ||||||||||||
Total | $ | 95,575 | $ | - | $ | - | $ | 95,575 | |||||||||
Liabilities | |||||||||||||||||
Derivative liability¹ | $ | - | $ | - | $ | 9,800 | $ | 9,800 | Income approach | ||||||||
Equity agreement² | - | - | 16,800 | 16,800 | Income approach | ||||||||||||
Total | $ | - | $ | - | $ | 26,600 | $ | 26,600 |
December 31, 2018 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Valuation technique | |||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 78,301 | $ | - | $ | - | $ | 78,301 | Market approach | ||||||||
Restricted cash | 22,552 | - | - | 22,552 | Market approach | ||||||||||||
Investment in equity securities | 3,656 | - | - | 3,656 | Market approach | ||||||||||||
Total | $ | 104,509 | $ | - | $ | - | $ | 104,509 | |||||||||
Liabilities | |||||||||||||||||
Derivative liability¹ | $ | - | $ | - | $ | 9,835 | $ | 9,835 | Income approach | ||||||||
Equity agreement² | - | - | 16,924 | 16,924 | Income approach | ||||||||||||
Total | $ | - | $ | - | $ | 26,759 | $ | 26,759 |
(1) | Consideration due to the sellers of Shannon LNG once first gas is supplied from the terminal to be built. |
(2) | To be paid in shares at the earlier of agreed-upon date or the commencement of significant construction activities specified in the Shannon LNG Agreement. |
7. | Restricted cash |
December 31, 2019 | December 31, 2018 | |||||||
Collateral for performance under customer agreements | $ | 15,000 | $ | 15,095 | ||||
Collateral for LNG purchases | 35,000 | 927 | ||||||
Collateral for letters of credit and performance bonds | 7,388 | 6,238 | ||||||
Debt service reserve account | 8,299 | - | ||||||
Other restricted cash | 250 | 292 | ||||||
Total restricted cash | $ | 65,937 | $ | 22,552 | ||||
Current restricted cash | $ | 30,966 | $ | 30 | ||||
Non-current restricted cash | 34,971 | 22,522 |
8. | Inventory |
December 31, 2019 | December 31, 2018 | |||||||
LNG and natural gas inventory | $ | 57,436 | $ | 15,611 | ||||
ADO inventory | 4,746 | - | ||||||
Materials, supplies and other | 1,250 | 348 | ||||||
Total inventory | $ | 63,432 | $ | 15,959 |
9. | Prepaid expenses and other current assets |
December 31, 2019 | December 31, 2018 | |||||||
Prepaid expenses | $ | 7,458 | $ | 2,169 | ||||
Prepaid LNG | 7,097 | 16,170 | ||||||
Due from affiliates (Note 24) | 1,577 | 890 | ||||||
Other current assets | 22,520 | 10,788 | ||||||
Total prepaid expenses and other current assets | $ | 38,652 | $ | 30,017 |
10. | Investment in equity securities |
December 31, 2019 | ||||||||||||
(in thousands of U.S. dollars except shares) | Number of Shares | Cost | Fair value | |||||||||
Investment in equity securities¹ | 295,256 | $ | 3,667 | $ | 2,540 |
December 31, 2018 | ||||||||||||
(in thousands of U.S. dollars except shares) | Number of Shares | Cost | Fair value | |||||||||
Investment in equity securities | 1,476,280 | $ | 3,667 | $ | 3,656 |
December 31, 2019 | December 31, 2018 | |||||||
Beginning of period | $ | 3,656 | $ | 6,333 | ||||
Unrealized loss | (1,116 | ) | (2,677 | ) | ||||
End of period | $ | 2,540 | $ | 3,656 |
11. | Construction in progress |
December 31, 2019 | December 31, 2018 | |||||||
Balance at beginning of period | $ | 254,700 | $ | 35,413 | ||||
Additions | 315,188 | 224,871 | ||||||
Transferred to property, plant and equipment, net (Note 12) | (103,301 | ) | (5,584 | ) | ||||
Balance at end of period | $ | 466,587 | $ | 254,700 |
12. | Property, plant and equipment, net |
December 31, 2019 | December 31, 2018 | |||||||
LNG liquefaction facilities | $ | 66,273 | $ | 65,631 | ||||
Gas terminals | 52,781 | - | ||||||
Gas pipelines | 11,692 | - | ||||||
ISO containers and other equipment | 54,932 | 17,792 | ||||||
Land | 15,401 | 12,779 | ||||||
Leasehold improvements | 8,054 | 7,229 | ||||||
Accumulated depreciation | (16,911 | ) | (9,391 | ) | ||||
Total property, plant and equipment, net | $ | 192,222 | $ | 94,040 |
13. | Intangible assets, net |
December 31, 2019 | ||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Life | |||||||||||||
Definite-lived intangible assets | ||||||||||||||||
Shannon LNG leases and permits | $ | 42,157 | $ | 1,198 | $ | 40,959 | 40 | |||||||||
Easements | 1,559 | 139 | 1,420 | 30 | ||||||||||||
Indefinite-lived intangible assets | ||||||||||||||||
Easements | 1,161 | - | 1,161 | n/a | ||||||||||||
Total intangible assets | $ | 44,877 | $ | 1,337 | $ | 43,540 |
December 31, 2018 | ||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Life | |||||||||||||
Definite-lived intangible assets | ||||||||||||||||
Shannon LNG leases and permits | $ | 43,191 | $ | 134 | $ | 43,057 | 40 | |||||||||
Total intangible assets | $ | 43,191 | $ | 134 | $ | 43,057 |
Year ending December 31: | ||||
2020 | $ | 1,116 | ||
2021 | 1,116 | |||
2022 | 1,116 | |||
2023 | 1,116 | |||
2024 | 1,116 | |||
Thereafter | 36,799 | |||
Total | $ | 42,379 |
14. | Finance leases, net |
December 31, 2019 | December 31, 2018 | |||||||
Finance leases | $ | 290,947 | $ | 306,832 | ||||
Unearned income | (198,691 | ) | (213,682 | ) | ||||
Total finance leases, net | $ | 92,256 | $ | 93,150 | ||||
Current portion | $ | 1,082 | $ | 943 | ||||
Non-current | 91,174 | 92,207 |
Year ending December 31: | ||||
2020 | $ | 15,986 | ||
2021 | 15,946 | |||
2022 | 15,941 | |||
2023 | 15,947 | |||
2024 | 15,990 | |||
Thereafter | 211,137 | |||
Total | $ | 290,947 |
15. | Other non-current assets |
December 31, 2019 | December 31, 2018 | |||||||
Port access rights and initial lease costs | $ | 17,762 | $ | 21,871 | ||||
Nonrefundable deposit | 22,262 | 10,810 | ||||||
Upfront payments to customers | 5,904 | - | ||||||
Contract asset (Note 4) | 19,474 | - | ||||||
Cost to fulfill (Note 4) | 8,508 | - | ||||||
Other | 7,716 | 2,574 | ||||||
Total other non-current assets | $ | 81,626 | $ | 35,255 |
16. | Accrued liabilities |
December 31, 2019 | December 31, 2018 | |||||||
Accrued construction costs | $ | 25,037 | $ | 41,343 | ||||
Accrued IPO costs | - | 5,296 | ||||||
Accrued bonuses | 14,991 | 12,582 | ||||||
Other accrued expenses | 14,915 | 8,291 | ||||||
Total accrued liabilities | $ | 54,943 | $ | 67,512 |
17. | Debt |
December 31, 2019 | December 31, 2018 | |||||||
Term Loan Facility, due January 21, 2020 | $ | 495,000 | $ | 272,192 | ||||
Senior Secured Bonds, due September 2034 | 70,960 | - | ||||||
Senior Secured Bonds, due December 2034 | 10,823 | - | ||||||
Senior Unsecured Bonds, due September 2036 | 42,274 | - | ||||||
Total debt | $ | 619,057 | $ | 272,192 | ||||
Current portion of debt | $ | - | $ | 272,192 | ||||
Non-current portion of debt | 619,057 | - |
Year ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Interest per contractual rates | $ | 32,283 | $ | 9,363 | $ | 5,760 | ||||||
Amortization of debt issuance costs | 12,301 | 3,617 | 696 | |||||||||
Total interest costs | 44,584 | 12,980 | 6,456 | |||||||||
Capitalized interest | 25,172 | 1,732 | - | |||||||||
Total interest expense | $ | 19,412 | $ | 11,248 | $ | 6,456 |
18. | Income taxes |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
United States | $ | (194,481 | ) | $ | (74,873 | ) | $ | (32,647 | ) | |||
Foreign | (9,399 | ) | (3,647 | ) | 1,502 | |||||||
Loss before taxes | $ | (203,880 | ) | $ | (78,520 | ) | $ | (31,145 | ) |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Current: | ||||||||||||
Domestic | $ | - | $ | - | $ | - | ||||||
Foreign | 47 | 7 | 5 | |||||||||
Total current tax expense | 47 | 7 | 5 | |||||||||
Deferred: | ||||||||||||
Domestic | - | - | - | |||||||||
Foreign | 392 | (345 | ) | 521 | ||||||||
Total deferred tax expense (benefit) | 392 | (345 | ) | 521 | ||||||||
Total provision for (benefit from) income taxes | $ | 439 | $ | (338 | ) | $ | 526 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Income tax at the statutory rate | 21.0 | % | - | - | ||||||||
Foreign tax rate differential | 0.8 | % | 0.4 | % | (1.7 | %) | ||||||
Foreign tax on foreign operations | 2.9 | % | - | - | ||||||||
Foreign permanent adjustments | 5.0 | % | - | - | ||||||||
Income attributable to non-controlling interest | (18.2 | %) | - | - | ||||||||
Domestic valuation allowance | (2.1 | %) | - | - | ||||||||
Foreign valuation allowance | (10.8 | %) | - | - | ||||||||
Other | 1.2 | % | - | - | ||||||||
Effective income tax rate | (0.2 | %) | 0.4 | % | (1.7 | %) |
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Balance at the beginning of the period | $ | 241 | $ | - | ||||
Increase recognized in the statement of operations | 80,670 | 241 | ||||||
Balance at the end of the period | $ | 80,911 | $ | 241 |
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Deferred tax assets: | ||||||||
Investment in NFI | $ | 46,185 | $ | - | ||||
Accrued interest | 14,047 | 3,181 | ||||||
Federal and state net operating loss carryforward | 3,215 | - | ||||||
Foreign net operating loss carryforward | 19,713 | 4,824 | ||||||
Share-based compensation | 8,958 | - | ||||||
Other | 406 | - | ||||||
Total deferred tax assets | 92,524 | 8,005 | ||||||
Valuation allowance | (80,911 | ) | (241 | ) | ||||
Deferred tax assets, net of valuation allowance | 11,613 | 7,764 | ||||||
Deferred tax liabilities: | ||||||||
Property and equipment | (11,820 | ) | (7,579 | ) | ||||
Total deferred tax liabilities | (11,820 | ) | (7,579 | ) | ||||
Net deferred tax (liabilities) assets | $ | (207 | ) | $ | 185 |
19. | Commitments and contingencies |
2020 | 2021 | 2022 | 2023 | 2024+ | ||||||||||||||||
LNG inventory purchases | $ | 276,904 | $ | 224,872 | $ | - | $ | - | $ | - | ||||||||||
Gas inventory purchases | 8,714 | 6,213 | 6,205 | 6,271 | 12,196 |
20. | Earnings per share |
Year Ended December 31, 2019 | ||||
Numerator: | ||||
Net loss | $ | (204,319 | ) | |
Less: net loss attributable to non-controlling interests | 170,510 | |||
Net loss attributable to Class A shares | $ | (33,809 | ) | |
Denominator: | ||||
Weighted-average shares-basic and diluted | 20,862,555 | |||
Net loss per share - basic and diluted | $ | (1.62 | ) |
December 31, 2019 | ||||
Unvested RSUs¹ | 3,137,415 | |||
Class B shares² | 144,342,572 | |||
Shannon Equity Agreement shares3 | 1,083,995 | |||
Total | 148,563,982 |
¹ | Represents the number of instruments outstanding at the end of the period. |
² | Class B shares at the end of the period are considered potentially dilutive Class A shares. |
3 | Class A shares that would be issued in relation to the Shannon LNG Equity agreement. |
21. | Share-based compensation |
Restricted Share Units | Weighted-average grant date fair value per share | |||||||
Non-vested RSUs as of December 31, 2018 | - | $ | - | |||||
Granted | 5,404,823 | 13.48 | ||||||
Vested and shares issued | (1,284,383 | ) | 13.53 | |||||
Forfeited | (983,025 | ) | 13.51 | |||||
Non-vested RSUs as of December 31, 2019 | 3,137,415 | $ | 13.44 |
22. | Stockholder’s equity and Members’ equity |
23. | Leases, as lessee |
Lease | Non-cancellable Initial Term | Renewal Option | Rent Escalation (per annum) | ||||
LNG vessel time charter | 2 to 7 years | 0 to 5 years | 0% to 2% | ||||
Marine port berth | 20 to 25 years | 0 to 20 years | See Note (1) | ||||
Office space and land | monthly to 7 years | 0 to 5 years | 2.5% to 5.0% |
(1) | One marine port berth lease has a 15% lease payment escalation after year five |
Year ending December 31: | ||||
2020 | $ | 37,776 | ||
2021 | 35,478 | |||
2022 | 18,387 | |||
2023 | 7,083 | |||
2024 | 7,151 | |||
Thereafter | 26,458 | |||
Total | $ | 132,333 |
24. | Related party transactions |
December 31, 2019 | December 31, 2018 | |||||||
Amounts due to affiliates | $ | 10,252 | $ | 4,481 | ||||
Amounts due from affiliates | 1,577 | 890 |
25. | Customer concentrations |
26. | Unaudited quarterly financial data |
(in thousands of U.S. dollars, except per share data) | ||||||||||||||||
Three months ended | ||||||||||||||||
March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | |||||||||||||
Revenues | $ | 29,951 | $ | 39,766 | $ | 49,656 | $ | 69,752 | ||||||||
Operating loss | (59,337 | ) | (43,959 | ) | (47,726 | ) | (36,253 | ) | ||||||||
Net loss | (60,292 | ) | (51,233 | ) | (54,424 | ) | (38,370 | ) | ||||||||
Net loss attributable to stockholders | (13,557 | ) | (6,186 | ) | (6,723 | ) | (7,343 | ) | ||||||||
Basic and diluted loss per share (1) | (0.96 | ) | (0.28 | ) | (0.30 | ) | (0.30 | ) |
Three months ended | ||||||||||||||||
March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | |||||||||||||
Revenues | $ | 25,709 | $ | 26,799 | $ | 28,424 | $ | 31,369 | ||||||||
Operating loss | (9,465 | ) | (17,141 | ) | (9,922 | ) | (21,960 | ) | ||||||||
Net loss | (10,913 | ) | (18,825 | ) | (13,681 | ) | (34,763 | ) | ||||||||
Net loss attributable to stockholders | (10,913 | ) | (18,825 | ) | (13,609 | ) | (34,729 | ) |
27. | Subsequent events |
December 31, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | - | $ | 42 | ||||
Total current assets | - | 42 | ||||||
Investment in subsidiaries | 84,805 | 268,265 | ||||||
Total assets | $ | 84,805 | $ | 268,307 | ||||
Stockholders’ equity | ||||||||
Members’ capital, no par value, 500,000,000 shares authorized, 67,983,095 shares issued and outstanding as of December 31, 2018 | $ | - | $ | 426,741 | ||||
Class A shares, 23,607,096 shares, issued and outstanding as of December 31, 2019; 0 shares issued and outstanding as of December 31, 2018 | 130,658 | - | ||||||
Class B shares, 144,342,572 shares, issued and outstanding as of December 31, 2019; 0 shares issued and outstanding as of December 31, 2018 | - | - | ||||||
Accumulated deficit | (45,823 | ) | (158,423 | ) | ||||
Accumulated other comprehensive loss | (30 | ) | (11 | ) | ||||
Total stockholders’ equity | 84,805 | 268,307 | ||||||
Total liabilities and stockholders’ equity | $ | 84,805 | $ | 268,307 |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Selling, general and administrative | $ | - | $ | (179 | ) | $ | (40 | ) | ||||
Operating loss | - | (179 | ) | (40 | ) | |||||||
Other income, net | 106 | 337 | - | |||||||||
Income (loss) before taxes and equity in net loss of subsidiaries | 106 | 158 | (40 | ) | ||||||||
Tax expense (benefit) | - | - | - | |||||||||
Equity in net loss of subsidiaries | (33,915 | ) | (78,234 | ) | (31,631 | ) | ||||||
Net Loss | (33,809 | ) | (78,076 | ) | (31,671 | ) | ||||||
Other comprehensive (loss) income | (30 | ) | (2,677 | ) | 1,303 | |||||||
Comprehensive loss | $ | (33,839 | ) | $ | (80,753 | ) | $ | (30,368 | ) |
Year Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net Loss | $ | (33,809 | ) | $ | (78,076 | ) | $ | (31,671 | ) | |||
Adjustments for: | ||||||||||||
Equity in net losses of subsidiaries | 33,915 | 78,234 | 31,631 | |||||||||
Net cash provided by/(used in) operating activities | 106 | 158 | (40 | ) | ||||||||
Cash flows from investing activities | ||||||||||||
Investment in subsidiaries | (275,054 | ) | (146,941 | ) | (123,371 | ) | ||||||
Net cash used in investing activities | (275,054 | ) | (146,941 | ) | (123,371 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Proceeds from IPO | 274,948 | - | - | |||||||||
Repayment of affiliate note | - | - | (120 | ) | ||||||||
Capital contributed from Members | - | 20,150 | 20,100 | |||||||||
Collection of subscription receivable | - | 50,000 | - | |||||||||
Net cash provided by financing activities | 274,948 | 70,150 | 19,980 | |||||||||
Net (decrease) in cash and cash equivalents and restricted cash | - | (76,633 | ) | (103,431 | ) | |||||||
Cash and cash equivalents and restricted cash - beginning of period | - | 76,675 | 180,106 | |||||||||
Cash and cash equivalents and restricted cash - end of period | $ | - | $ | 42 | $ | 76,675 |
1. | Organization and presentation |
2. | Debt |
Description | Balance at Beginning of Year | Additions(1) | Deductions | Balance at End of Year | ||||||||||||
Year ended December 31, 2019 | ||||||||||||||||
Allowance for doubtful accounts | $ | 257 | $ | - | $ | (257 | ) | $ | - | |||||||
Year ended December 31, 2018 | ||||||||||||||||
Allowance for doubtful accounts | - | 257 | - | 257 | ||||||||||||
Year ended December 31, 2017 | ||||||||||||||||
Allowance for doubtful accounts | - | - | - | - |
(1) | Amount expensed is included within Selling, general and administrative |