SEC Comment Letter for New Fortress Energy Inc. (NFE) (CIK 0001749723) (NFE) — Oct 26, 2018
New Fortress Energy Inc. (NFE) (CIK 0001749723)
Date: Oct. 26, 2018 · CIK: 0001749723 · Accession: 0000000000-18-033559
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 3561 October 2 5, 2018 Wesley R. Edens Chief Executive Officer NFE Financial Holdings LLC 111 W. 19th Street, 8th Floor New York, NY 10011
Re: NFE Financial Holdings LLC Amendment No. 1 to Draft Registration Statement on Form S-1 Submitted October 5 , 2018 CIK No. 000179723
Dear Mr. Edens :
We have reviewed your amended draft registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter by providing the requested information and either submitting an amended draft registration statement or publicly filing your registration statement on EDGAR. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments and your amended draft registration statement or filed registration statement, we may have additional comments.
Overview
Our Business Model , page 5
1. You state on page 6 that you have contracts, letters of intent or expect to secure contracts in the near term to sell LNG volumes in excess of 8.3 million gallons per day. Please revise to clarify the amount of LNG volumes for which you are currently contractually committed to deliver, as you do on page 9.
Our Liquefaction Assets, page 8
2. Please include a discussio n of your Miami facility. You mention it towards the end of this discussion in the context of all of your assets but you do not provide a summary of
Wesley R. Edens NFE Financial Holdings LLC October 2 5, 2018 Page 2
the facility on a standalone basis. In doing so, please explain the amount of, if any, LNG volumes you are contractually committed to deliver from this facility.
Illustrative LNG Production and Natural Gas Sale Economics, page 10
3. It appears you are presenting a projection on an MMBtu basis of your anticipated operating EBITDA reflecting operations in Jamaica, anticipated developments in Puerto Rico, Ireland and Mexico and estimated liquefaction of natural gas at the Pennsylvania Facilities or the Haynesville Facilities to the exclusion of your operations in Miami . Please advise if our understanding is incorrec t. We also note your projection is for achieving unit economics in 2022 which is four years in the future. Explain to us in detail how projection of a metric (EBITDA) on a per unit basis (MMBtu), as opposed to traditional projections of revenue, net inco me and EPS, complies with Item 10(b)(2) of Regulation S -K. In addition, please explain how you have a reasonable basis to project results four years in the future given your particular circumstances and limited operating history. Please be detailed in y our response.
Risk Factors Our business is dependent upon obtaining substantial additional fundin g from various sources…, page 28
4. We note your response to comment 11 and your revised disclosure. We further note your reference to a “ committed debt financing of $___ million.” In the appropriate place in your prospectus including, but not limited to, your Liquidity and Capital Resources disclosure, please provide a description of your “committed debt financing of $___ million.”
Management’s Discussion and Analysis of Financial Condition and Results of Operations , page
5. We note your response to comment 16 and your revised disclosure. However, in your Note 1 to your Notes to Consolidated Financial Statements you continue to disclose that you are “engaged in providing energy, logistical services, and financing capital investment to end users worldwide, seeking to convert their operating assets from diesel or heavy fuel oil to Liquefied Natural Gas (“LNG”).” Please revise for consistency.
Financial Statements
Consolidated Statements of Changes in Members’ Equity, page F -5
6. Please provide a rollforward of the number of member shares outstanding for each period a balance sheet is presented. You may present this information here or in the notes to the consolidated financial statements. Refer to Rule 3 -04 of Regulation S -X.
Wesley R. Edens NFE Financial Holdings LLC October 2 5, 2018 Page 3
Notes to Consolidated Financial Statements
7. We have reviewed your response to comment 21 regarding the disclosures required by ASC 280 -10-50-40. Please separately pr esent interest revenue generated from your direct financing arrangements and, if applicable, steam revenues.
12. Finance Leases, net, page F -16
8. We have reviewed your response to comment 22. We note that you appear to account for your Terminal Arrangement under ASC 840 for the fixed generation capacity component and under ASC 605 for the variable commodity component. Please clarify how you determ ined it was appropriate to separately account for the fixed and variable features under two accounting models rather than as a combined arrangement entirely under lease accounting. In doing so, explain why the variable commodity component does not represe nt contingent rent under ASC 840 -10-25-4.
Exhibits
9. We note your response to comment 23. Your analysis with respect to your GSAs seems to address your “planned and expected business,” when your analysis should be with respect to your current operations. Please revise your analysis to address whether or not your existing GSAs constitute a major part of your current business or file your existing GSAs as exhibits.
Please contact Yong Kim, Staff Accountant, at (202) 551 -3323 , or Andrew Blume, Staff Accountant, at (202) 551 -3254 if you have questions regarding comments on the financial statements and related matters. Please contact Scott Anderegg, Attorney Adviser, at (202) 551 - 3342, or me at (202) 551 -3720 if you have questions regarding the comments.
Sincerely,
/s/ Mara L. Ransom
Show Raw Text
Mail Stop 3561
October 2 5, 2018
Wesley R. Edens
Chief Executive Officer
NFE Financial Holdings LLC
111 W. 19th Street, 8th Floor
New York, NY 10011
Re: NFE Financial Holdings LLC
Amendment No. 1 to Draft Registration Statement on Form S-1
Submitted October 5 , 2018
CIK No. 000179723
Dear Mr. Edens :
We have reviewed your amended draft registration statement and have the following
comments. In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.
Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Overview
Our Business Model , page 5
1. You state on page 6 that you have contracts, letters of intent or expect to secure contracts
in the near term to sell LNG volumes in excess of 8.3 million gallons per day. Please
revise to clarify the amount of LNG volumes for which you are currently contractually
committed to deliver, as you do on page 9.
Our Liquefaction Assets, page 8
2. Please include a discussio n of your Miami facility. You mention it towards the end of
this discussion in the context of all of your assets but you do not provide a summary of
Wesley R. Edens
NFE Financial Holdings LLC
October 2 5, 2018
Page 2
the facility on a standalone basis. In doing so, please explain the amount of, if any, LNG
volumes you are contractually committed to deliver from this facility.
Illustrative LNG Production and Natural Gas Sale Economics, page 10
3. It appears you are presenting a projection on an MMBtu basis of your anticipated
operating EBITDA reflecting operations in Jamaica, anticipated developments in Puerto
Rico, Ireland and Mexico and estimated liquefaction of natural gas at the Pennsylvania
Facilities or the Haynesville Facilities to the exclusion of your operations in Miami .
Please advise if our understanding is incorrec t. We also note your projection is for
achieving unit economics in 2022 which is four years in the future. Explain to us in
detail how projection of a metric (EBITDA) on a per unit basis (MMBtu), as opposed to
traditional projections of revenue, net inco me and EPS, complies with Item 10(b)(2) of
Regulation S -K. In addition, please explain how you have a reasonable basis to project
results four years in the future given your particular circumstances and limited operating
history. Please be detailed in y our response.
Risk Factors
Our business is dependent upon obtaining substantial additional fundin g from various sources…,
page 28
4. We note your response to comment 11 and your revised disclosure. We further note your
reference to a “ committed debt financing of $___ million.” In the appropriate place in
your prospectus including, but not limited to, your Liquidity and Capital Resources
disclosure, please provide a description of your “committed debt financing of $___
million.”
Management’s Discussion and Analysis of Financial Condition and Results of Operations , page
57
5. We note your response to comment 16 and your revised disclosure. However, in your
Note 1 to your Notes to Consolidated Financial Statements you continue to disclose that
you are “engaged in providing energy, logistical services, and financing capital
investment to end users worldwide, seeking to convert their operating assets from diesel
or heavy fuel oil to Liquefied Natural Gas (“LNG”).” Please revise for consistency.
Financial Statements
Consolidated Statements of Changes in Members’ Equity, page F -5
6. Please provide a rollforward of the number of member shares outstanding for each period
a balance sheet is presented. You may present this information here or in the notes to the
consolidated financial statements. Refer to Rule 3 -04 of Regulation S -X.
Wesley R. Edens
NFE Financial Holdings LLC
October 2 5, 2018
Page 3
Notes to Consolidated Financial Statements
7. We have reviewed your response to comment 21 regarding the disclosures required by
ASC 280 -10-50-40. Please separately pr esent interest revenue generated from your direct
financing arrangements and, if applicable, steam revenues.
12. Finance Leases, net, page F -16
8. We have reviewed your response to comment 22. We note that you appear to account for
your Terminal Arrangement under ASC 840 for the fixed generation capacity component
and under ASC 605 for the variable commodity component. Please clarify how you
determ ined it was appropriate to separately account for the fixed and variable features
under two accounting models rather than as a combined arrangement entirely under lease
accounting. In doing so, explain why the variable commodity component does not
represe nt contingent rent under ASC 840 -10-25-4.
Exhibits
9. We note your response to comment 23. Your analysis with respect to your GSAs seems
to address your “planned and expected business,” when your analysis should be with
respect to your current operations. Please revise your analysis to address whether or not
your existing GSAs constitute a major part of your current business or file your existing
GSAs as exhibits.
Please contact Yong Kim, Staff Accountant, at (202) 551 -3323 , or Andrew Blume, Staff
Accountant, at (202) 551 -3254 if you have questions regarding comments on the financial
statements and related matters. Please contact Scott Anderegg, Attorney Adviser, at (202) 551 -
3342, or me at (202) 551 -3720 if you have questions regarding the comments.
Sincerely,
/s/ Mara L. Ransom
Mara L. Ransom
Assistant Director
Office of Consumer Products