New Fortress Energy(NFE) - 2024 Q4 - Annual Report

Debt and Financial Obligations - As of December 31, 2024, the company had approximately $9,027.1 million in aggregate principal amount of indebtedness outstanding on a consolidated basis[189]. - The New 2029 Notes bear an interest rate of 12.000% per annum, significantly increasing the company's annual interest expense[192]. - The company expects to incur additional indebtedness to assist in developing operations and is considering alternative financing options, including the opportunistic sale of non-core assets[193]. - The company may need to refinance existing indebtedness with new debt that could have higher interest rates, increasing fixed costs[191]. - The company has incurred and may incur additional debt or issue equity, which could dilute existing Class A common stockholders and negatively affect the market price of Class A common stock[252]. Liquidity and Operational Risks - The company may face substantial liquidity problems if cash flows from operating activities are insufficient to fund day-to-day operations or debt service obligations[190]. - Joint ventures may restrict operational flexibility and require credit support, potentially leading to adverse effects on the company's business[194]. - The company relies on various sources for additional funding, which may not be available or may come with unfavorable terms[193]. - The company is exposed to risks from weather events and natural disasters, which could materially affect operations and projects[198]. - The company may incur impairments to long-lived assets due to significant negative industry or economic trends[197]. Regulatory and Compliance Risks - Regulatory provisions, such as those from the Dodd-Frank Act, could adversely affect the company's ability to hedge risks associated with its business[196]. - The company is subject to extensive environmental, social, health, and safety regulations, which may lead to increased compliance costs and operational restrictions[200]. - The company may face substantial liabilities and fines for non-compliance with environmental regulations, potentially exceeding insurance coverage limits[202]. - Climate change legislation and regulations could impose more stringent restrictions on greenhouse gas emissions, increasing operational costs and reducing demand for natural gas[205]. - Hydraulic fracturing regulations may become more stringent, potentially raising natural gas prices and adversely affecting the company's pricing advantage[208]. Indigenous Rights and Community Relations - The company must comply with international and national laws regarding indigenous community rights, which could impact operations and lead to construction delays[210]. - The company has entered agreements with some indigenous communities for land use, but failure to obtain necessary authorizations could result in increased costs and operational impacts[212]. - The company is exposed to potential legal challenges regarding the adequacy of existing Brazilian legal requirements for indigenous rights protection[211]. Market and Economic Conditions - Changes in public sentiment regarding fossil fuels may lead to reduced demand for LNG, impacting the company's market position[207]. - The development of offshore natural gas and LNG operations is subject to extensive regulations from Mexican authorities, which may increase operating costs and capital expenditures[214]. - The company's operations are affected by economic, political, and social conditions in various jurisdictions, which could materially impact financial results[236]. - Foreign exchange fluctuations may adversely affect the company's financial condition, as revenues and expenses are incurred in multiple currencies[238]. Corporate Governance and Shareholder Matters - A small number of original investors control a significant portion of voting power, potentially conflicting with the interests of other shareholders[244]. - Concentrated ownership may deter hostile takeovers and limit the ability of other shareholders to influence corporate decisions[245]. - New Fortress Energy Holdings has assigned rights to the Founder Entities to nominate individuals for the board of directors as long as they own at least 5% of Class A common stock[246]. - The company does not expect to pay dividends for the foreseeable future, as any future payments will be at the discretion of the board of directors and subject to various restrictions[251]. Legal and Tax Risks - The company may face significant legal proceedings that could adversely affect its financial position and operations[261]. - A change in tax laws could result in a materially higher tax expense, affecting the company's after-tax profitability[260]. - Non-compliance with trade and economic sanctions could result in severe penalties, affecting access to U.S. capital markets[221]. Operational and Security Risks - Cybersecurity threats pose significant risks to the company's operations and data integrity, potentially affecting business continuity[229]. - The company faces increased capital and operating costs due to the implementation of security technologies and controls, with no assurance that these measures will prevent security breaches[230]. - The company does not maintain insurance against all risks, including business interruption and political risk, which could lead to significant liabilities and losses[231]. - Labor costs are expected to rise, and the company may struggle to attract and retain skilled workers, impacting operations and increasing operating costs[233]. - The company is subject to labor disputes and strikes, particularly in Latin America, which could disrupt operations and increase costs[235]. Stock Market and Financial Performance - The market price of the company's Class A common stock may be volatile, influenced by various factors including operating results and market conditions[239]. - The market price of Class A common stock may fluctuate significantly due to various factors, including market conditions and the company's operational performance[256]. - The company's share price may decline if analysts cease coverage or change recommendations unfavorably[263]. - The COVID-19 pandemic has caused economic disruptions, impacting operations and financial performance, with future crises remaining unpredictable[264]. Commodity and Interest Rate Risks - The company is exposed to commodity price risks, particularly related to LNG prices, which could impact business operations[484]. - A 100-basis point change in market interest rates could affect the fair value of fixed-rate debt by approximately$ 143 million[486]. - A 100-basis point change in market interest rates would alter annual interest expenses by about $16 million[487]. - The company has entered into foreign exchange forward contracts totaling approximately$ 211.5 million to mitigate exchange rate risks[488]. - Operations outside Brazil are primarily conducted in U.S. dollars, limiting exposure to foreign currency fluctuations[489].