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Item 9A. Controls and Procedures

2021-03-16 compared with 2020-03-04 · 740 added, 944 removed, 535 unchanged (76% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and

principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2019.

Our disclosure controls and

procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer

and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Based upon that

evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2019 at the reasonable assurance level.

In accordance with Rules 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2020.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2020 at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during our last quarter of 2019 that

have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during our last quarter of 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted

accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that

controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

As of December 31, 2019, our management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting

established in “Internal Control – Integrated Framework (2013)”, issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment and those criteria, management determined that we maintained effective

internal control over financial reporting as of December 31, 2019.

Attestation Report of the Registered Public Accounting Firm

Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal controls over financial reporting for as long as we

are an “emerging growth company” pursuant to the provisions of the JOBS Act.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

As of December 31, 2020, our management assessed the effectiveness of our internal control over financial reporting based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control – Integrated Framework (2013)”.

Based on this assessment, management determined that we maintained effective internal control over financial reporting as of December 31, 2020.

The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by EY, an independent registered public accounting firm, as stated in their report, which appears herein.

Other Information.

Directors, Executive Officers and Corporate Governance.

The information required by this Item 10 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2019 in connection with our 2020 annual meeting of

shareholders and is incorporated herein by reference.

The information required by this Item 10 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2020 in connection with our 2021 annual meeting of shareholders and is incorporated herein by reference.

Executive Compensation

The information required by this Item 11 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2019 in connection with our 2020 annual meeting of

shareholders and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2019 in connection with our 2020 annual meeting of

shareholders and is incorporated herein by reference.

The information required by this Item 11 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2020 in connection with our 2021 annual meeting of shareholders and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

The information required by this Item 12 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2020 in connection with our 2021 annual meeting of shareholders and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item 13 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2019 in connection with our 2020 annual meeting of

shareholders and is incorporated herein by reference.

The information required by this Item 13 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2020 in connection with our 2021 annual meeting of shareholders and is incorporated herein by reference.

Principal Accounting Fees and Services.

The information required by this Item 14 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2019 in connection with our 2020 annual meeting of

shareholders and is incorporated herein by reference.

The information required by this Item 14 is set forth in the Company’s Proxy Statement to be filed with the SEC within 120 days after December 31, 2020 in connection with our 2021 annual meeting of shareholders and is incorporated herein by reference.

Exhibits, Financial Statement Schedules.

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Financial Statement Schedules.

See Schedule I and Schedule II set forth on page F-31.

See Schedule II set forth on page F-31.

The exhibits required to be filed by this Item 15(b) are set forth in the Exhibit Index included below.

Agreement and Plan of Merger, dated as of January 13, 2021, by and among NFE, GMLP Merger Sub, GP Buyer, GMLP and the General Partner (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K (File No.

001-38790), filed with the Commission on January 20, 2021)

Transfer Agreement, dated as of January 13, 2021, by and among GP Buyer, GLNG and the General Partner (incorporated by reference to Exhibit 2.2 to the Registrant’s Form 8-K (File No.

001-38790), filed with the Commission on January 20, 2021)

Agreement and Plan of Merger, dated as of January 13, 2021, by and among NFE, Hygo Merger Sub, Hygo and the Hygo Shareholders (incorporated by reference to Exhibit 2.3 to the Registrant’s Form 8-K (File No.

001-38790), filed with the Commission on January 20, 2021)

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)

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

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.

Certificate of Incorporation of New Fortress Energy Inc.

(incorporated herein by reference to Exhibit 99.3 of the Company’s Quarterly Report on Form 10-Q filed on August 4, 2020)

Bylaws of New Fortress Energy Inc.

(incorporated herein by reference to Exhibit 99.4 of the Company’s Quarterly Report on Form 10-Q filed on August 4, 2020)

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 99.1 to the Registrant's Current Report on Form 8-K (File No.

001-38790), filed with the Commission on August 7, 2020)

Indenture, dated September 2, 2020, by and among New Fortress Energy Inc., the subsidiary guarantors from time to time party thereto, and U.S.

Bank National Association, as trustee and collateral agent (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.

001-38790), filed with the Commission on September 2, 2020)

First Supplemental Indenture, dated December 17, 2020, by and among New Fortress Energy Inc., the subsidiary guarantors from time to time party thereto and U.S.

Bank National Association, as trustee and as notes collateral agent (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.

001-38790), filed with the Commission on December 18, 2020)

Pledge and Security Agreement, by and among New Fortress Energy Inc., the subsidiary guarantees from time to time party thereto, and U.S.

Bank National Association, as trustee and collateral agent (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No.

001-38790), filed with the Commission on September 2, 2020)

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

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)

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

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.

Utsler (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1/A (File No.

333-228339), filed with the Commission on January 14, 2019)

1 unchanged sentence

Edens and Randal A.

Nardone (incorporated by reference to

Exhibit 4.1 to the Registrant’s Form 8-K (File No.

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

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)

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.

Gas Sales Agreement, dated August 5, 2015, by and among 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)]

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.

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.

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)

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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)

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.

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.

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

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)

Mutual Agreement, dated June 3, 2020, by and among New Fortress Energy LLC, Fortress Equity Partners GP, LLC, WRE 2012 Trust LLC, FEP HoldCo LLC, Wesley R Edens, Randal A Nardone, NFE SMRS Holdings LLC and NFE Sub LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K (File No.

001-38790), filed with the Commission on June 9, 2020)

Support Agreement, dated as of January 13, 2021, by and among NFE, GMLP, GLNG and the General Partner (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K (File No.

001-38790), filed with the Commission on January 20, 2021)

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)

Separation Agreement, dated as of November 25, 2019, between NFE Management LLC and Michael J.

List of Subsidiaries of New Fortress Energy LLC

List of Subsidiaries of New Fortress Energy Inc.

Consent of Ernst & Young L.L.P.

5 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

XBRL Instance Document

XBRL Schema Document

XBRL Calculation Linkbase Document

XBRL Label Linkbase Document

XBRL Presentation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

Filed as an exhibit to this Annual Report

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Form 10-K Summary.

Pursuant to the requirements of 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

NEW FORTRESS ENERGY LLC

Pursuant to the requirements of 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NEW FORTRESS ENERGY INC.

March 16, 2021

2 unchanged sentences

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates

/s/ Wesley R.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Chief Executive Officer and Chairman

1 unchanged sentence

March 16, 2021

/s/ Christopher S.

Christopher S.

Chief Financial Officer

1 unchanged sentence

March 16, 2021

Christopher S.

/s/ Yunyoung Shin

Yunyoung Shin

Chief Accounting Officer

1 unchanged sentence

March 16, 2021

Yunyoung Shin

/s/ Randal A.

March 16, 2021

1 unchanged sentence

March 16, 2021

William Griffin

March 16, 2021

/s/ Matthew Wilkinson

March 4, 2020

Matthew Wilkinson

March 16, 2021

/s/ Desmond Iain Catterall

March 16, 2021

Desmond Iain Catterall

/s/ Katherine E.

March 16, 2021

Index to Consolidated Financial Statements

6 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of New Fortress Energy LLC

To the Shareholders and the Board of Directors of New Fortress Energy Inc.

Opinion on Internal Control Over Financial Reporting

We have audited New Fortress Energy Inc.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework (the COSO criteria).

In our opinion, New Fortress Energy Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the accompanying consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

Our report dated March 16, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying “Management’s Report on Internal Control Over Financial Reporting”.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

March 16, 2021

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of New Fortress Energy Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of New Fortress Energy LLC (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive

loss, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and the financial statement schedules listed in the Index at Item 15(a)(2) (collectively referred to

as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its

operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of New Fortress Energy Inc.

(the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework and our report dated March 16, 2021 expressed an unqualified opinion thereon.

Adoption of ASU No.

As discussed in Note 3 to the consolidated financial statements, the Company changed its method of accounting for leases in 2020 due to the adoption of ASU No.

2016-02, Leases .

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting

firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an

understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as

well as evaluating the overall presentation of the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Identification of Distinct Performance Obligations and Leases

Description of the Matter

As described in Note 2(p) to the consolidated financial statements, the Company’s contracts with customers may contain one or several performance obligations to provide goods or services or may contain a lease.

At inception or upon amendment, management performs an evaluation to identify the obligations within the contract and determine the authoritative guidance applicable to such obligations.

The Company allocates consideration received from customers between lease and non-lease components based on the relative fair value of each component.

Auditing management’s identification of performance and other obligations in each contract was challenging as it involved complex judgement to identify all promised goods and services and determining whether the customer can benefit from the promised goods or services on their own or on a combined basis.

In addition, auditing management’s determination of whether a contract is or contains a lease required judgement to determine which party to the agreement controls how and for what purpose the underlying asset is used.

How We Addressed the Matter

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's revenue recognition process, including controls over the evaluation of new and amended customer contracts and the identification of distinct performance obligations and equipment leases.

Our audit procedures included, among others, evaluating the Company’s assessment of the authoritative guidance applicable to its customer contracts, inspecting contracts entered into or amended during the period, and evaluating management’s interpretation of certain contract provisions when identifying and determining distinct performance obligations and equipment leases.

For example, we selected a sample of new and amended customer contracts executed in the current year and compared the identified promised goods and services, including lease components, to the analyses used by management to measure and allocate arrangement consideration.

We also conducted meetings with various personnel at the Company responsible for negotiating the contract and overseeing the delivery of the performance obligations in order to understand the nature of the explicit and implicit promised goods and services as well as to understand whether the promises were capable of being distinct and distinct in the context of the contract.

For leases elements, this evaluation included understanding whether the customer controls how and for what purpose the underlying equipment is used.

Impairment Assessment of Long-Lived Assets

Description of the Matter

As described in Note 2(k) to the consolidated financial statements, the Company performs a recoverability assessment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable.

Indicators may include, but are not limited to, factors such as adverse changes in the regulatory environment in a jurisdiction where the Company operates, unfavorable events impacting the supply chain for liquified natural gas (“LNG”) to the Company’s operations, early termination of a significant customer contract, the introduction of newer technology, or a decision to discontinue an in-process development project.

When such indicators are identified, management determines if long-lived assets or asset groups are impaired by comparing the related undiscounted expected future cash flows to its carrying value.

When the undiscounted cash flow analysis indicates a long-lived asset or asset group is not recoverable, the amount of the impairment loss is determined by measuring the excess of the carrying amount of the long-lived asset or asset group over its fair value.

Auditing management’s determination of whether impairment indicators exist such that a recoverability test of the Company’s long-lived assets is required, was highly subjective and involves significant judgment.

For instance, auditing management’s assessment of events or changes in circumstances that may be an indicator that an asset group is not recoverable was challenging due to the judgment applied in both the identification of such factors, and the evaluation of whether the factors have an impact on the recovery of the carrying value of the asset group.

How We Addressed the Matter

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s impairment assessment process.

This included management’s controls to review for asset groups that may have been impacted by the impairment indicators described above.

To test the Company’s evaluation of potential indicators of impairment of its long- lived assets, our audit procedures included, among others, assessing the methodologies and testing the completeness and accuracy of the Company’s analysis of events or changes in circumstances.

For example, we inquired of management (including project development personnel) to understand their evaluation of changes in the regulatory environments of the jurisdictions in which the Company operates and their impact on the recoverability of the related long-lived assets and asset groups.

We also obtained capital budgets and construction bids, among other evidence, to understand management’s plans with respect to in-process development projects.

We considered information about Company’s projects from external sources that support or provide contrary evidence to management’s evaluation of potential impairment indicators.

/s/ Ernst & Young LLP

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March 16, 2021

New Fortress Energy LLC

New Fortress Energy Inc.

Consolidated Balance Sheets

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(in thousands of U.S.

dollars, except share amounts)

dollars, except share and per share amounts)

Current assets

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Receivables, net of allowances of $ 98 and $ 0 , respectively

Finance leases, net

Prepaid expenses and other current assets

Prepaid expenses and other current assets, net

Total current assets

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Property, plant and equipment, net

Right-of-use assets

Intangible assets, net

Finance leases, net

Intangibles, net

Investment in equity securities

Deferred tax asset, net

Other non-current assets

Deferred tax assets, net

Other non-current assets, net

Current liabilities

Term loan facility

Accounts payable

Accrued liabilities

Current lease liabilities

Due to affiliates

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Long-term debt

Deferred tax liability, net

Non-current lease liabilities

Deferred tax liabilities, net

Other long-term liabilities

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Stockholders’ equity

Members’ capital, no par value, 500,000,000 shares authorized, 67,983,095 shares issued and outstanding as of December 31, 2018

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

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

Class A common stock, $ 0.01 par value, 750.0 million shares authorized, 174.6 million issued and outstanding as of December 31, 2020

Class A shares, 0 shares issued and outstanding as of December 31, 2020; 23.6 million shares issued and outstanding as of December 31, 2019

Class B shares, 0 shares issued and outstanding as of December 31, 2020; 144.3 million shares, issued and outstanding as of December 31, 2019

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Total stockholders’ equity attributable to NFE

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The accompanying notes are an integral part of these consolidated financial statements.

New Fortress Energy LLC

New Fortress Energy Inc.

Consolidated Statements of Operations and Comprehensive Loss

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Selling, general and administrative

Loss on mitigation sales

Contract termination charges and loss on mitigation sales

Depreciation and amortization

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Interest expense

Other income, net

Other expense (income), net

Loss on extinguishment of debt, net

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Other comprehensive loss:

Unrealized loss on currency translation adjustment

Unrealized loss (gain) on available-for-sale investment

Unrealized (gain) loss on currency translation adjustment

Unrealized loss on available-for-sale investment

Comprehensive loss

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The accompanying notes are an integral part of these consolidated financial statements.

New Fortress Energy LLC

New Fortress Energy Inc.

Consolidated Statements of Changes in Stockholders’ Equity

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Class B shares

Class A common stock

Accumulated other

comprehensive

(loss) income

Non-controlling

Total stockholders’

stockholders’

(loss) income

Balance as of January 1, 2018

Other comprehensive income

Capital contributions

Cost of issuing capital

Stock subscription receivable

Balance as of December 31, 2017

Other comprehensive loss

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Balance as of December 31, 2019

Cumulative effect of accounting change

Class A stock issued, net of issuance costs

Other comprehensive income

Share-based compensation expense

Issuance of shares for vested RSUs

Shares withheld from employees related to share-based compensation, at cost

Exchange of NFI units

( 144,342,572

Conversion from LLC to Corporation

( 169,174,104

Balance as of December 31, 2020

The accompanying notes are an integral part of these consolidated financial statements.

New Fortress Energy LLC

New Fortress Energy Inc.

Consolidated Statements of Cash Flows

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Depreciation and amortization

Loss on extinguishment of debt, net

Non-cash contract termination charges and loss on mitigation sales

Loss on extinguishment and financing expenses

Deferred taxes

Change in value of investment in equity securities

Share-based compensation

Loss on mitigation sales

Changes in operating assets and liabilities:

(Increase) in receivables

(Increase) in inventories

Decrease (Increase) in inventories

(Increase) in other assets

Increase (Decrease) in accounts payable/accrued liabilities

Increase in amounts due to affiliates

Increase (Decrease) in other liabilities

Decrease in right-of-use assets

Increase in accounts payable/accrued liabilities

(Decrease) Increase in amounts due to affiliates

(Decrease) in lease liabilities

Increase in other liabilities

Net cash used in operating activities

Cash flows from investing activities

Purchase of investment in equity securities

Capital expenditures

Principal payments received on finance lease, net

Acquisition of consolidated subsidiary

Other investing activities

Net cash used in investing activities

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Proceeds from IPO

Repayment of affiliate note

Proceeds from issuance of Class A common stock

Payments related to tax withholdings for share-based compensation

Payment of dividends

Capital contributed from Members

Payment of stock issuance costs

Collection of subscription receivable

Payment of stock issuance costs

Net cash provided by financing activities

Net (decrease) in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash – beginning of period

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The accompanying notes are an integral part of these consolidated financial statements.

New Fortress Energy LLC (“NFE,” together with its subsidiaries, the “Company”) is a Delaware limited liability company formed by New Fortress Energy Holdings LLC (‘New Fortress Energy Holdings”)

on August 6, 2018.

The Company is engaged in providing energy and logistical services to end-users worldwide seeking to convert their operating assets from automotive diesel oil (“ADO”) or heavy fuel oil to LNG or natural gas.

currently sources LNG from a combination of purchases under long-term supply contracts and the Company’s liquefaction facility in Miami, Florida.

The Company has liquefaction and regasification operations in the United States and Jamaica and is

developing assets in Mexico, Ireland, Nicaragua, and Angola.

New Fortress Energy Inc.

(“NFE,” together with its subsidiaries, the “Company”) is a Delaware corporation formed by New Fortress Energy Holdings LLC (“New Fortress Energy Holdings”).

The Company is a global integrated gas-to-power infrastructure company that seeks to use natural gas to satisfy the world’s large and growing power needs and is engaged in providing energy and development services to end-users worldwide seeking to convert their operating assets from diesel or heavy fuel oil to LNG.

The Company currently sources LNG from a combination of its own liquefaction facility in Miami, Florida and purchases on the open market.

The Company has liquefaction, regasification and power generation operations in the United States and Jamaica.

The Company manages, analyzes and reports on its business and results of operations on the basis of one operating segment.

The chief operating decision maker makes resource allocation decisions

and assesses performance based on financial information presented on a consolidated basis.

The chief operating decision maker makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis.

Significant accounting policies

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Basis of presentation and principles of consolidation

The consolidated financial statements were prepared in accordance with GAAP.

The accompanying consolidated financial statements contained herein reflect all normal and recurring adjustments which

are, in the opinion of management, necessary to provide a fair statement of the financial position, results of operations, and cash flows of the Company for the periods presented.

The consolidated financial statements include the accounts of

the Company and its wholly-owned and majority-owned consolidated subsidiaries.

The ownership interest of other investors in consolidated subsidiaries is recorded as non-controlling interest.

All significant intercompany transactions and

balances have been eliminated in consolidation.

On February 4, 2019, the Company completed an initial public offering (“IPO”) and a series of other transactions, in which the Company issued and sold 20,000,000 Class A shares at an IPO price of

$14.00 per share.

The accompanying consolidated financial statements contained herein were prepared in accordance with GAAP.

The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned consolidated subsidiaries.

The ownership interest of other investors in consolidated subsidiaries is recorded as a non-controlling interest.

All significant intercompany transactions and balances have been eliminated on consolidation.

Certain prior year amounts have been reclassified to conform to current year presentation.

On February 4, 2019, the Company completed an initial public offering (“IPO”) and a series of other transactions, in which the Company issued and sold 20,000,000 Class A shares at an IPO price of $ 14.00 per share.

The Company’s Class A shares began trading on NASDAQ Global Select Market (“NASDAQ”) under the symbol “NFE” on January 31, 2019.

Net proceeds from the IPO were $257.0 million, after deducting underwriting discounts and

commissions and transaction costs.

Net proceeds from the IPO were $ 257.0 million, after deducting underwriting discounts and commissions and transaction costs.

These proceeds were contributed to New Fortress Intermediate LLC (“NFI”), an entity formed in conjunction with the IPO, in exchange for 20,000,000 limited liability company units in NFI (“NFI LLC Units”).

addition, New Fortress Energy Holdings contributed all of its interests in consolidated subsidiaries that comprised substantially all of its historical operations to NFI in exchange for NFI LLC Units.

In connection with the IPO, New Fortress

Energy Holdings also received 147,058,824 Class B shares of the Company, which is equal to the number of NFI LLC Units held by New Fortress Energy Holdings immediately following the IPO.

Immediately following the IPO, New Fortress Energy

Holdings held a significant interest in NFE through its ownership of 147,058,824 Class B shares, representing an 88.0% voting and non-economic interest.

New Fortress Energy Holdings also had an 88.0% economic interest in NFI through its

ownership of 147,058,824 of NFI LLC Units.

New Fortress Energy Holdings has been determined to be NFE’s predecessor for accounting purposes.

On March 1, 2019, the underwriters of the IPO exercised their option to purchase an additional 837,272 Class A shares at the IPO price of $14.00 per share, less underwriting discounts, which

resulted in $11.0 million in additional net proceeds after deducting $0.7 million of underwriting discounts and commissions, such that there were 20,837,272 outstanding Class A shares.

In connection with the exercise of the underwriters’ option

to purchase an additional 837,272 Class A shares, NFE contributed such additional net proceeds to NFI in exchange for 837,272 NFI LLC Units.

NFE is a holding company whose sole material asset is a controlling equity interest in NFI.

As the sole managing member of NFI, NFE operates and controls all of the business and affairs of NFI,

and through NFI and its subsidiaries, conducts the Company’s historical business.

The contribution of the assets of New Fortress Energy Holdings and net proceeds from the IPO to NFI was treated as a reorganization of entities under common

In addition, New Fortress Energy Holdings contributed all of its interests in consolidated subsidiaries that comprised substantially all of its historical operations to NFI in exchange for NFI LLC Units.

In connection with the IPO, New Fortress Energy Holdings also received 147,058,824 Class B shares of NFE, which is equal to the number of NFI LLC Units held by New Fortress Energy Holdings immediately following the IPO.

New Fortress Energy Holdings retained a significant interest in NFE through its ownership of 147,058,824 Class B shares, representing an 88.0 % voting and non-economic interest.

New Fortress Energy Holdings also had an 88.0 % economic interest in NFI through its ownership of 147,058,824 of NFI LLC Units.

New Fortress Energy Holdings is NFE’s predecessor for accounting purposes.

On March 1, 2019, the underwriters of the IPO exercised their option to purchase an additional 837,272 Class A shares at the IPO price of $ 14.00 per share, less underwriting discounts, which resulted in $ 11.0 million in additional net proceeds after deducting $ 0.7 million of underwriting discounts and commissions, such that there were 20,837,272 outstanding Class A shares.

In connection with the exercise of the underwriters’ option to purchase an additional 837,272 Class A shares, NFE contributed such additional net proceeds to NFI in exchange for 837,272 NFI LLC Units.

Until the Exchange Transactions (as defined below) were completed, NFE was a holding company whose sole material asset was a controlling equity interest in NFI.

As the sole managing member of NFI, NFE operated and controlled all of the business and affairs of NFI, and through NFI and its subsidiaries, conducted the Company’s historical business.

The contribution of the assets of New Fortress Energy Holdings and net proceeds from the IPO to NFI was treated as a reorganization of entities under common control (the “Reorganization”).

As a result, NFE presented the consolidated balance sheets and statements of operations and comprehensive loss of New Fortress Energy Holdings for all periods prior to the IPO.

The Company’s financial statements also include a

non-controlling interest related to the portion of NFI LLC Units not owned by NFE.

Prior to the IPO, NFE had no operations and had no assets or liabilities.

On June 3, 2020 , the Company entered into a mutual agreement (the “Mutual Agreement”) with the members holding the majority voting interest in New Fortress Energy Holdings (“Exchanging Members”) and NFE Sub LLC, a wholly-owned subsidiary of NFE.

Pursuant to the Mutual Agreement, the Exchanging Members agreed to deliver a block redemption notice in accordance with the Amended and Restated Limited Liability Company Agreement of NFI (the “NFI LLCA”) with respect to all of the NFI LLC Units, together with an equal number of Class B shares of NFE, that such Exchanging Members indirectly own as members of New Fortress Energy Holdings.

Pursuant to the Mutual Agreement, NFE agreed to exercise the Call Right (as defined in the NFI LLCA), pursuant to which NFE would acquire such NFI LLC Units and such Class B shares in exchange for Class A shares of NFE (the “Exchange Transactions”).

The Exchange Transactions were completed on June 10, 2020 .

In connection with the closing of the Exchange Transactions, NFE issued 144,342,572 Class A shares in exchange for an equal number of NFI LLC Units, together with an equal number of Class B shares of NFE.

Following the completion of the Exchange Transactions, NFE owns all of the NFI LLC Units directly or indirectly and no Class B shares remain outstanding.

Prior to the Exchange Transactions, the Company recognized the Exchanging Members’ economic interest in NFI as non-controlling interest in the Company’s consolidated financial statements.

Results of operations for the period prior to the date of the Exchange Transactions, June 10, 2020 , was attributed to non-controlling interest based on the Exchanging Members’ interest in NFI;

subsequent to the Exchange Transactions, results of operations, excluding results attributable to other investors in non-wholly owned subsidiaries, were recognized as net income or loss attributable to stockholders.

Amounts that were attributable to these Exchanging Members’ prior interest in NFI previously shown as non-controlling interest on the Company’s consolidated balance sheets have been reclassified to Class A shares.

On August 7, 2020 , the Company converted New Fortress Energy LLC (“NFE LLC”) from a Delaware limited liability company to a Delaware corporation named New Fortress Energy Inc.

(“the Conversion”).

Since the IPO, NFE LLC has been a corporation for U.S.

federal tax purposes and converting NFE LLC from a limited liability company to a corporation has no effect on the U.S.

federal tax treatment of the Company or its shareholders.

Upon the Conversion, each Class A share, representing Class A limited liability company interests of NFE LLC (“Class A shares”), outstanding immediately prior to the Conversion was converted into one issued and outstanding, fully paid and nonassessable share of Class A common stock, $ 0.01 par value per share, of NFE (“Class A common stock”).

Class A shares shown on the Company’s consolidated statements of changes in stockholders’ equity were reclassified to Class A common stock and Additional paid-in capital with no change to total stockholders’ equity.

As of December 31, 2020 , NFE had 174,622,862 Class A common stock outstanding.

Use of estimates

liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include relative fair value allocation between revenue and lease components

of contracts with customers, total consideration and fair value of identifiable net assets related to acquisitions, and fair value of equity awards granted to both employees and non-employees.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include relative fair value allocations between revenue and lease components of contracts with customers, determination of current expected credit losses, the incremental borrowing rates used in the determination of lease liabilities, total consideration and fair value of identifiable net assets related to acquisitions and the fair value of equity awards granted to both employees and non-employees.

Management evaluates its estimates and related assumptions regularly.

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The Company has certain foreign subsidiaries where the functional currency is the local currency.

All of the assets and liabilities of these subsidiaries are converted to U.S.

dollars at the exchange rate in

effect at the balance sheet date, income and expense accounts are translated at average rates for the period, and shareholder’s equity accounts are translated at historical rates.

The effects of translating financial statements of foreign

operations into our reporting currency are recognized as a cumulative translation adjustment in consolidated other comprehensive income (loss).

All of the assets and liabilities of these subsidiaries are translated to U.S.

dollars at the exchange rate in effect at the balance sheet date;

income and expense accounts are translated at average rates for the period.

The effects of translating financial statements of foreign operations into our reporting currency are recognized as a cumulative translation adjustment in accumulated other comprehensive income (loss).

The Company also has foreign subsidiaries that have a functional currency of the U.S.

Purchases and sales of assets and income and expense items denominated in foreign currencies are

remeasured into U.S.

Purchases and sales of assets and income and expense items denominated in foreign currencies are remeasured into U.S.

dollar amounts on the respective dates of such transactions.

Net realized foreign currency gains or losses relating to the differences between these recorded amounts and the U.S.

dollar equivalent actually received or paid

are included within Other income, net in the consolidated statements of operations and comprehensive loss.

dollar equivalent actually received or paid are included within Other expense (income), net in the consolidated statements of operations and comprehensive loss.

Gains and losses on intercompany foreign currency transactions that are long-term in nature and which the Company does not intend to settle in the foreseeable future, are also recognized in accumulated other comprehensive income (loss).

Accumulated foreign currency translation adjustments are reclassified from accumulated other comprehensive income (loss) to net income only when realized upon sale or upon complete or substantially complete liquidation of the investment in a foreign entity.

If the Company commits to a plan to sell or liquidate a foreign entity, accumulated foreign currency translation adjustments would be included in carrying amounts in impairment assessments.

Cash and cash equivalents

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Restricted cash consists of funds that are contractually restricted as to usage or withdrawal and have been presented separately from cash and cash equivalents on the consolidated balance sheets.

Receivables are reported net of allowances for doubtful accounts.

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make

required payments.

The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of customers, unusual macroeconomic conditions, and

historical experience.

As of December 31, 2019 and 2018, the Company recognized an allowance for doubtful accounts of $0 and $257, respectively.

LNG and natural gas inventories and ADO inventories are recorded at weighted average cost, and materials and other inventory are recorded at cost.

The Company’s cost to convert from natural gas to

LNG, which primarily consists of labor, depreciation, and other direct costs to operate liquefaction facilities, is reflected in Inventory on the consolidated balance sheets.

Receivables are reported at amortized cost, net of an allowance for current expected credit losses.

Amounts are written off against the allowance when management is certain that outstanding amounts will not be collected.

The Company estimates expected credit losses based on relevant information about the current credit quality of customers, past events, including historical experience, and reasonable and supportable forecasts that affect the collectability of the reported amount.

Credit loss expense, inclusive of credit loss expense on all categories of financial assets, is recorded within Selling, general and administrative in the consolidated statements of operations and comprehensive loss.

LNG and natural gas inventories and automotive diesel oil inventories are recorded at weighted average cost, and materials and other inventory are recorded at cost.

The Company’s cost to convert from natural gas to LNG, which primarily consists of labor, depreciation and other direct costs to operate liquefaction facilities, is reflected in Inventory on the consolidated balance sheets.

Inventory is adjusted to the lower of cost or net realizable value each quarter.

Changes in the value of inventory are recorded within Cost of sales in the consolidated statements of operations

and comprehensive loss.

Changes in the value of inventory are recorded within Cost of sales in the consolidated statements of operations and comprehensive loss.

LNG is subject to “boil-off,” a natural loss of gas volume over time when LNG is exposed to environments with temperatures above its optimum storage state.

Boil-off losses are expensed through

Cost of sales in the consolidated statements of operations and comprehensive loss in instances where gas cannot be contained and recycled back into the production process in the period in which the loss occurs.

Boil-off losses are expensed through Cost of sales in the consolidated statements of operations and comprehensive loss in instances where gas cannot be contained and recycled back into the production process.

Construction in progress

Construction in progress is recorded at cost, and at the point at which the constructed asset is put into use, the full cost of the asset is reclassified from Construction in progress to Property,

plant and equipment, net or Finance leases, net on the consolidated balance sheets.

Construction progress payments, engineering costs, and other costs directly relating to the asset under construction are capitalized during the construction

period, provided the completion of the construction project is deemed probable or if the costs may be utilized in future projects.

Construction in progress is recorded at cost, and at the point at which the constructed asset is put into use, the full cost of the asset is reclassified from Construction in progress to Property, plant and equipment, net or Finance leases, net on the consolidated balance sheets.

Construction progress payments, engineering costs and other costs directly relating to the asset under construction are capitalized during the construction period, provided the completion of the construction project is deemed probable or if the costs are associated with activities that could be utilized in future projects.

Depreciation is not recognized during the construction period.

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Expenditures for construction activities and betterments that extend the useful life of the asset are capitalized.

maintenance and overhauls are capitalized and will be depreciated over the period expected until the next anticipated major maintenance or overhaul , while expenditures for routine maintenance and repairs are

charged to expense as incurred within Operations and maintenance in the consolidated statements of operations and comprehensive loss.

The Company depreciates property, plant and equipment using the straight-line depreciation method over the

estimated economic life of the asset or lease term, whichever is shorter using the following useful lives:

Major maintenance and overhauls are capitalized and depreciated over the expected period until the next anticipated major maintenance or overhaul, while expenditures for routine maintenance and repairs are charged to expense as incurred within Operations and maintenance in the consolidated statements of operations and comprehensive loss.

The Company depreciates property, plant and equipment using the straight-line depreciation method over the estimated economic life of the asset or lease term, whichever is shorter using the following useful lives:

Useful life (Yrs)

LNG liquefaction facilities

Terminal and power plant equipment

CHP facilities

Gas terminals

Gas pipelines

ISO containers and other equipment

LNG liquefaction facilities

Gas pipelines

Leasehold improvements

The Company reviews the remaining useful life of its assets on a regular basis to determine whether changes have taken place that would suggest that a change to depreciation policies is warranted.

Upon retirement or disposal of property, plant and equipment, the cost and related accumulated depreciation are removed from the account, and the resulting gains or losses, if any, are recorded in

the consolidated statements of operations and comprehensive loss.

Upon retirement or disposal of property, plant and equipment, the cost and related accumulated depreciation are removed from the account, and the resulting gains or losses, if any, are recorded in the consolidated statements of operations and comprehensive loss.

Asset retirement obligations (“AROs”)

AROs are recognized for legal obligations associated with the retirement of long-lived assets that result from the acquisition, leasing, construction, development and/or normal use of the assets

and for conditional AROs in which the timing or method of settlement are conditional on a future event.

The fair value of a liability for an ARO is recognized in the period in which the liability is incurred if a reasonable estimate of fair

value can be made and is accreted to its final value over the life of the liability.

AROs are recognized for legal obligations associated with the retirement of long-lived assets that result from the acquisition, leasing, construction, development and/or normal use of the assets and for conditional AROs in which the timing or method of settlement are conditional on a future event.

The fair value of a liability for an ARO is recognized in the period in which the liability is incurred if a reasonable estimate of fair value can be made and is accreted to its final value over the life of the liability.

The initial fair value of the liability is added to the carrying amount of the associated asset.

This additional carrying amount is depreciated over the

estimated useful life of the asset.

This additional carrying amount is depreciated over the estimated useful life of the asset.

The Company estimates the fair value of the ARO liability based on the present value of expected cash flows using a credit-adjusted risk-free rate.

Liabilities for AROs may be incurred over more

than one reporting period if the events that create the obligation occur over more than one period or if estimates change.

Liabilities for AROs may be incurred over more than one reporting period if the events that create the obligation occur over more than one period or if estimates change.

The liability is accreted to its present value each period and the capitalized cost is depreciated in Depreciation and amortization in the consolidated statements of operations and comprehensive loss.

Upon settlement of the obligation, the Company eliminates the liability and based on the actual cost to retire, may incur a gain or loss.

There were no settlements of AROs during the years ended December 31, 2020 and 2019.

Impairment of long-lived assets

The Company performs a recoverability assessment of each of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

discontinue the development of a long-lived asset, early termination of a significant customer contract, or the introduction of newer technology.

The Company performs a recoverability assessment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Indicators may include, but are not limited to, adverse changes in the regulatory environment in a jurisdiction where the Company operates, unfavorable events impacting the supply chain for LNG to the Company’s operations, a decision to discontinue the development of a long-lived asset, early termination of a significant customer contract or the introduction of newer technology.

When performing a recoverability assessment, the Company measures whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its carrying value.

event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge.

Management develops the assumptions used in the recoverability assessment based on active contracts, current and future expectations of the global demand for LNG and natural gas, as well as

information received from third party industry sources.

The Company did not record an impairment during the years ended December 31, 2019, 2018, and 2017.

In the event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge.

Management develops the assumptions used in the recoverability assessment based on active contracts, current and future expectations of the global demand for LNG and natural gas, as well as information received from third party industry sources.

The Company did no t record an impairment during the years ended December 31, 2020, 2019 and 2018.

Investment in equity securities

The Company has adopted ASU 2016-01 (defined below) for the year beginning January 1, 2019.

Under the new guidance, the investment in equity securities is carried at fair

value with gains or losses recorded in earnings in Other income, net in the consolidated statements of operations and comprehensive loss.

See “Note 10.

Investment in equity securities” for more information.

Prior to the adoption of this guidance, unrealized gains or losses for investment in equity securities were recorded in Other comprehensive income (loss).

See “Note 3(b)

Adoption of new and revised standards – New and amended standards adopted by the Company” for additional information related to the adoption of ASU 2016-01.

Investment in equity securities is carried at fair value and included in Other non-current assets on the consolidated balance sheets, with gains or losses recorded in earnings in Other expense (income), net in the consolidated statements of operations and comprehensive loss.

Intangible assets

The Company accounts for intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other .

business combination or asset acquisition, the Company may obtain identifiable intangible assets.

Upon a business combination or asset acquisition, the Company may obtain identifiable intangible assets.

Intangible assets with a finite life are amortized over the estimated useful life of the asset under the straight-line method.

Indefinite lived intangible assets are not amortized.

Intangible assets with an indefinite useful life are tested for impairment on an annual basis or more frequently if changes in circumstances

indicate that the carrying amount may not be recoverable.

If the intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in the consolidated statements of operations and comprehensive

Intangible assets with an indefinite useful life are tested for impairment on an annual basis or more frequently if changes in circumstances indicate that it is more likely than not that the asset is impaired.

Indefinite lived intangible assets are evaluated for impairment either under the qualitative assessment option or the two-step quantitative test.

If the carrying amount of an intangible asset being tested for impairment exceeds its fair value, the excess is recognized as impairment expense in the consolidated statements of operations and comprehensive loss.

Long-term debt and debt issuance costs

The Company’s debt consists of credit facilities with financial institutions and secured and unsecured bonds.

Costs directly related to the issuance of debt are reported on the consolidated

balance sheets as a reduction from the carrying amount of the recognized debt liability and amortized over the term of the debt using the effective interest method.

Interest and related amortization of debt issuance costs recognized during

major development and construction projects are capitalized and included in the cost of the project.

Legal and contingencies

The Company may be involved in legal actions in the ordinary course of business, including governmental and administrative investigations, inquiries and proceedings concerning employment, labor, environmental, and

other claims.

The Company’s debt has historically consisted of credit facilities with financial institutions and secured and unsecured bonds.

Costs directly related to the issuance of debt are reported on the consolidated balance sheets as a reduction from the carrying amount of the recognized debt liability and amortized over the term of the debt using the effective interest method.

Interest and related amortization of debt issuance costs recognized during major development and construction projects are capitalized and included in the cost of the project.

Contingencies

The Company will recognize a loss contingency in the consolidated financial statements when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated.

The Company will disclose any loss

contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred.

The Company will disclose any loss contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred.

Gain contingencies are not recorded until realized.

Revenue recognition

The Company’s primary revenue stream is the sale of LNG or natural gas to its customers, which is presented as Operating revenue in the consolidated statements of operations and comprehensive loss.

Natural gas is

typically delivered by pipeline into the customer’s power generation facilities, and LNG is typically delivered in containers transported by truck to customer sites.

Revenue from sales of natural gas delivered by pipeline to a power generation

facility is recognized over time under the output method, as the customer takes control of the natural gas.

Revenue from sales of LNG delivered by truck is recognized at the point in time at which physical possession and the risks and rewards

of ownership transfer to the customer, either when the containers are shipped or delivered to the customers’ storage facilities, depending on the terms of the contract.

Because the nature, timing and uncertainty of revenue and cash flows are

substantially the same under both modes of delivery, the Company has presented Operating revenue on an aggregated basis.

The Company has concluded that variable consideration included in these agreements meets the exception for allocating variable consideration.

As such, the variable consideration for these contracts is allocated to

each distinct unit of LNG or natural gas delivered and recognized when that distinct unit of LNG or natural gas is delivered to the customer.

The Company’s contracts with customers may contain one or several performance obligations usually consisting of the sale of LNG, natural gas, and beginning in the first quarter of 2020, power and steam which are outputs from the Company’s natural gas-fueled infrastructure.

The transaction price for each of these contracts is structured using similar inputs and factors regardless of the output delivered to the customer.

The customers consume the benefit of the natural gas, power and steam when they are delivered by the Company to the customer’s power generation facilities or interconnection facility.

Natural gas, power and steam qualify as a series with revenue being recognized over time using an output method, based on the quantity of natural gas, power or steam that the customer has consumed.

LNG is typically delivered in containers transported by truck to customer sites.

Revenue from sales of LNG delivered by truck is recognized at the point in time at which physical possession and the risks and rewards of ownership transfer to the customer, either when the containers are shipped or delivered to the customers’ storage facilities, depending on the terms of the contract.

Because the nature, timing and uncertainty of revenue and cash flows are substantially the same for LNG, natural gas, power and steam, the Company has presented Operating revenue on an aggregated basis.

The Company has concluded that variable consideration included in its agreements meets the exception for allocating variable consideration.

As such, the variable consideration for these contracts is allocated to each distinct unit of LNG, natural gas, power or steam delivered and recognized when that distinct unit is delivered to the customer.

The Company’s contracts with customers to supply natural gas or LNG may contain a lease of equipment.

The Company allocates consideration received from customers between lease and non-lease components based on the

relative fair value of each component.

The Company allocates consideration received from customers between lease and non-lease components based on the relative fair value of each component.

The fair value of the lease component is estimated based on the estimated standalone selling price of the same or similar equipment leased to the customer.

The Company estimates the fair value of the

non-lease component by forecasting volumes and pricing of gas to be delivered to the customer over the lease term.

The leases of certain facilities and equipment to customers are accounted for as direct financing or operating leases.

Direct financing leases, net on the consolidated balance sheets represents the minimum lease

payments due, net of unearned revenue.

The lease payments are segregated into principal and interest components similar to a loan.

Unearned revenue is recognized on an effective interest method over the lease term and included in Other revenue

in the consolidated statements of operations and comprehensive loss.

The principal components of the lease payment are reflected as a reduction to the net investment in the finance lease.

For the Company’s operating leases, the amount allocated

to the leasing component is recognized over the lease term as Other revenue in the consolidated statements of operations and comprehensive loss.

In addition to the revenue recognized from the leasing components of agreements with customers, Other revenue includes revenue recognized from the construction and installation of equipment to transform customers’

facilities to operate utilizing natural gas or to allow customers to receive power or other outputs from our power generation facilities.

Revenue from these development services is recognized over time as the Company transfers control of the

asset to the customer, unless the customer is not able to obtain control over asset under construction until such services are completed, in which case, revenue is recognized when the services are completed and the customer has control of the

infrastructure.

The Company estimates the fair value of the non-lease component by forecasting volumes and pricing of gas to be delivered to the customer over the lease term.

The leases of certain facilities and equipment to customers are accounted for as finance or operating leases.

The current and non-current portion of finance leases are recorded within Prepaid expenses and other current assets and Finance leases, net on the consolidated balance sheets, respectively.

For finance leases accounted for as sales-type leases, the profit from the sale of equipment is recognized upon lease commencement in Other revenue in the consolidated statements of operations and comprehensive loss.

The lease payments for finance leases are segregated into principal and interest components similar to a loan.

Interest income is recognized on an effective interest method over the lease term and included in Other revenue in the consolidated statements of operations and comprehensive loss.

The principal component of the lease payment is reflected as a reduction to the net investment in the lease.

For the Company’s operating leases, the amount allocated to the leasing component is recognized over the lease term as Other revenue in the consolidated statements of operations and comprehensive loss.

In addition to the revenue recognized from the leasing components of agreements with customers, Other revenue includes revenue recognized from the construction, installation and commissioning of equipment, inclusive of natural gas delivered for the commissioning process, to transform customers’ facilities to operate utilizing natural gas or to allow customers to receive power or other outputs from our natural gas-fueled power generation facilities.

Revenue from these development services is recognized over time as the Company transfers control of the asset to the customer or based on the quantity of natural gas consumed as part of commissioning the customer’s facilities until such time that the customer has declared such conversion services have been completed.

If the customer is not able to obtain control over the asset under construction until such services are completed, revenue is recognized when the services are completed and the customer has control of the infrastructure.

Such agreements may also include a significant financing component, and the Company recognizes revenue for the interest income component over the term of the financing as Other revenue.

The timing of revenue recognition, billings and cash collections results in receivables, contract assets and contract liabilities.

Receivables represent unconditional rights to consideration;

unbilled amounts typically result from sales under long-term contracts when revenue recognized exceeds the amount billed to the customer.

Contract assets are comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent periods.

Both unbilled receivables and contract assets are recognized within Prepaid expenses and other current assets, net and Other non-current assets, net on the consolidated balance sheets.

Contract liabilities consist of deferred revenue and are recognized within Other current liabilities on the consolidated balance sheets.

Shipping and handling costs are not considered to be separate performance obligations.

These costs are recognized in the period in which the costs are incurred and presented within Cost of sales in the consolidated

statements of operations and comprehensive loss.

These costs are recognized in the period in which the costs are incurred and presented within Cost of sales in the consolidated statements of operations and comprehensive loss.

All such shipping and handling activities are performed prior to the customer obtaining control of the LNG or natural gas.

The Company collects sales taxes from its customers based on sales of taxable products and remits such collections to the appropriate taxing authority.

The Company has elected to present sales tax collections in the

consolidated statements of operations and comprehensive loss on a net basis and, accordingly, such taxes are excluded from reported revenues.

inception that the period between transferring goods to the customer and receiving payment from the customer will be one year or less.

Loss on mitigation sales

In connection with the purchase of firm cargoes of LNG, if the Company is unable to take physical possession of a portion of the contracted quantity due to capacity limitations, th e

supplier will attempt to sell the undelivered quantity through a mitigation sale.

The Company may incur a loss on a mitigation sale if the supplier is unable to sell the undelivered quantity for a price greater than the contracted price with

Losses incurred due to the Company’s capacity limitations are not indicative of the market value of the LNG purchased from the supplier, and these costs are not related to inventory delivered to the Company’s customers.

During the year ended December 31, 2019, the Company has recognized losses of $5,280 within Loss on mitigation sales in the consolidated statements of operations and comprehensive loss.

The Company has elected to present sales tax collections in the consolidated statements of operations and comprehensive loss on a net basis and, accordingly, such taxes are excluded from reported revenues.

The Company elected the practical expedient under which the Company does not adjust consideration for the effects of a significant financing component for those contracts where the Company expects at contract inception that the period between transferring goods to the customer and receiving payment from the customer will be one year or less.

Contract termination charges and l oss on mitigation sales

The Company has long-term supply agreements to purchase LNG, and the Company may incur termination charges to the extent that the Company cancels such contractual arrangements.

Further, if the Company is unable to take physical possession of a portion of the contracted quantity of LNG due to capacity limitations, the supplier will attempt to sell the undelivered quantity through a mitigation sale.

The Company may incur a loss on a mitigation sale if the cargo is unable to be sold for a price greater than the contracted price.

These costs are included in a separate line in the consolidated statements of operations and comprehensive loss because such costs are not related to inventory delivered to the Company’s customers.

During the year ended December 31, 2020 , the Company recognized a termination charge of $ 105,000 associated with an agreement with one of the Company’s LNG suppliers to terminate the obligation to purchase any LNG from this supplier for the remainder of 2020 .

Loss on mitigation sales of $ 19,114 were recognized during the year ended December 31, 2020 .

Leases, as lessee

Lease agreements are evaluated to classify the lease as capital or operating leases.

When substantially all of the risks and benefits of property ownership have been transferred to the Company, as

determined by the test criteria in the current authoritative guidance, the lease is recognized as a capital lease.

All other leases are classified as operating leases.

Lease payments under operating leases are recognized in the consolidated statements of operations and comprehensive loss on a straight-line basis over the term of the relevant lease.

Effective January 1, 2020, the Company adopted ASU 2016-02, Leases (Topic 842), using a modified retrospective approach.

The Company has entered into lease agreements for the use of LNG vessels, marine port space, office space, land and equipment, all of which are operating leases.

Right-of-use (“ROU”) assets recognized for these leases represent the Company’s right to use an underlying asset for the lease term, and the lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term.

Leases with terms of 12 months or less are excluded from ROU assets and lease liabilities on the balance sheet, and short-term lease payments are recognized on a straight-line basis over the lease term.

Variable payments under short-term leases are recognized in the period in which the obligation that triggers the variable payment becomes probable.

The Company, as lessee, has also elected the practical expedient not to separate lease and non-lease components for marine port space, office space, land and equipment leases.

The Company separates the lease and non-lease components for LNG vessel leases.

The allocation of lease payments between lease and non-lease components has been determined based on the relative fair value of each component.

The fair value of the lease component is estimated based on the estimated standalone price to lease a bareboat LNG vessel.

The fair value of the non-lease component is estimated based on the estimated standalone price of operating the respective vessel, inclusive of the costs of the crew and other operating costs.

The Company has elected the land easement practical expedient, which allows the Company to continue to account for pre-existing land easements as intangible assets under the accounting policy that existed before adoption of ASC 842.

Share-based compensation

In connection with the IPO, the Company adopted the New Fortress Energy LLC 2019 Omnibus Incentive Plan (the “Incentive Plan”), effective as of February 4, 2019.

Under the Incentive Plan, the

Company may issue options, share appreciation rights, restricted shares, restricted share units (“RSUs”), share bonuses or other share-based awards to selected officers, employees, non-employee directors and select non-employees of NFE or its

The Company accounts for share-based compensation in accordance with ASC 718, Compensation – Stock Compensation , and ASC 505, Equity , which require

all share-based payments to employees and members of the board of directors to be recognized as expense in the consolidated financial statements based on their grant date fair values.

The Company has elected not to estimate forfeitures of its

share-based compensation awards but will recognize the reversal in compensation expense in the period in which the forfeiture occurs.

Upon creation of the Incentive Plan, the Company early adopted ASU 2018-07 (as defined below).

See “Note 3(b).

Adoption of new and revised standards – New and amended standards adopted by the Company” for additional information related to ASU 2018-07 and “Note 21.

Share-based compensation” for additional information related to share-based compensation.

Federal and state income taxes

In conjunction with the closing of the Company’s IPO, New Fortress Energy Holdings contributed all of its interests in consolidated subsidiaries that comprised substantially all of its historical

operations to NFI, a partnership for U.S.

tax purposes, in exchange for NFI LLC Units.

NFE has elected to be taxed as a corporation and is subject to corporate U.S.

Under the Incentive Plan, the Company may issue options, share appreciation rights, restricted shares, restricted share units (“RSUs”), share bonuses or other share-based awards to selected officers, employees, non-employee directors and select non-employees of NFE or its affiliates.

The Company accounts for share-based compensation in accordance with ASC 718, Compensation – Stock Compensation , and ASC 505, Equity , which require all share-based payments to employees and members of the board of directors to be recognized as expense in the consolidated financial statements based on their grant date fair values.

The Company has elected not to estimate forfeitures of its share-based compensation awards but recognizes the reversal in compensation expense in the period in which the forfeiture occurs.

During the first quarter of 2020, the Company granted performance share units (“PSUs”) to certain employees and non-employees.

The PSUs contain a performance condition, and vesting will be determined based on achievement of an adjusted operating margin for the year ended December 31, 2021.

Federal and state income taxes

The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), under

which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and the tax bases of assets and liabilities by applying the

enacted tax rates in effect for the year in which the differences are expected to reverse.

Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax

assets and liabilities.

The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and the tax bases of assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse.

Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

2 unchanged sentences

Conclusions reached regarding tax positions are continually reviewed based on ongoing analyses of tax laws, regulations and interpretations thereof.

To the extent that the Company’s assessment of the conclusions

reached regarding tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made.

The Company reports interest and penalties relating to an

underpayment of income taxes, if applicable, as a component of income tax expense.

To the extent that the Company’s assessment of the conclusions reached regarding tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made.

The Company reports interest and penalties relating to an underpayment of income taxes, if applicable, as a component of income tax expense.

The Company has elected to treat amounts incurred under the global intangible low-taxed income (“GILTI”) rules as an expense in the period in which the tax is accrued.

Accordingly, no deferred tax assets or liabilities are recorded related to GILTI.

Foreign taxes

Certain subsidiaries of the Company are subject to income tax in the local jurisdiction in which they operate;

foreign taxes are computed based on the taxable income and the local jurisdictional

Certain subsidiaries may be subject to payroll taxes, excise taxes, property taxes, sales and use taxes, as well as income taxes in foreign countries in which they conduct

foreign taxes are computed based on the taxable income and the local jurisdictional tax rate.

Certain subsidiaries may be subject to payroll taxes, excise taxes, property taxes, sales and use taxes, in addition to income taxes in foreign countries in which they conduct business.

In addition, certain subsidiaries are exposed to local state taxes, such as franchise taxes.

Local state taxes that are not income taxes are recorded within Other income, net in the consolidated statements of operations and

comprehensive loss.

Local state taxes that are not income taxes are recorded within Other expense (income), net in the consolidated statements of operations and comprehensive loss.

Net loss per share

Basic net loss per share (“EPS”) is computed by dividing net loss attributable to Class A shares by the weighted average number of Class A shares outstanding during the period

following the reorganization.

Class B shares represent non-economic interests in the Company, and as such, earnings are not allocated to Class B shares.

Diluted EPS reflects potential dilution and is computed by dividing net loss attributable to Class A shares by the weighted average number of Class A shares outstanding during

the period following the reorganization increased by the number of additional Class A shares that would have been outstanding, including NFI LLC Units convertible into Class A shares and unvested RSUs.

The dilutive effect of outstanding awards,

if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable.

Refer to “Note 20.

Earnings per share” for additional information.

For the year ended December 31, 2019, there

was no potentially dilutive shares outstanding.

Basic net loss per share (“EPS”) is computed by dividing net loss attributable to Class A common stock by the weighted average number of shares of Class A common stock outstanding during the period following the Reorganization.

Class B shares represented non-economic interests in the Company, and as such, prior to the Exchange Transactions, earnings were not allocated to Class B shares.

The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable.

For the years ended December 31, 2020 and 2019, there were no potentially dilutive shares outstanding.

Adoption of new and revised standards

As an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such

pronouncements are made applicable to private companies.

The Company has elected to use this extended transition period under the JOBS Act.

The adoption dates discussed below reflect this election.

Following the issuance of Senior Secured Notes (defined below) on September 2, 2020, the Company ceased to qualify as an “emerging growth company” or EGC and is required to accelerate the adoption of certain new or revised accounting pronouncements.

The adoption dates below reflect the changes as a result of no longer qualifying as an EGC.

New standards, amendments and interpretations issued but not effective for the financial year beginning January 1, 2020:

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (“ASC 842”).

ASC 842 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheet and making targeted changes to lessor

Entities are also required to provide enhanced disclosure about leasing arrangements.

The Company will adopt the standard effective January 1, 2020 utilizing the modified retrospective transition method to apply the new guidance, which allows the Company to

recognize and measure leases upon adoption without modifying the comparative period financial statements.

The Company has determined its plan for election of the practical expedients as permitted under the transition guidance within ASC 842.

The Company has decided that it will not

elect the package of practical expedients and therefore, as part of transition, the Company will reassess the previous conclusions made under ASC 840 related to the identification of leases, classification of leases, and initial direct costs

based on the standards of ASC 842.

In connection with the reassessment of previous conclusions, the Company determined that the direct financing lease recognized related to the Montego Bay Terminal would no longer be a lease under ASC 842.

The Company expects to recognize a transition adjustment that will remove the unamortized net investment for the direct financing lease and recognize the underlying assets as Property, plant and equipment, net of depreciation that would have

been recognized since the commissioning of the Montego Bay Terminal.

Upon transition to ASC 842, the Company will recognize payments previously allocated to the leasing component of the gas sales agreement with this customer within Operating

revenues in the consolidated statements of operations and comprehensive loss.

Under ASC 840, amounts allocated to the leasing component have been recognized on an effective interest method over the lease term with only the portion

representing interest income recognized as Other revenues.

The Company will elect the practical expedients that will exempt leases with an initial term of 12 months or less from being recognized on the balance sheet and

will carry forward the current accounting treatment for existing land easements.

L ease and non-lease components will be combined as a single lease component for

most asset classes, with the exception of the Company’s vessel time charters.

The Company has not elected the hindsight practical expedient and therefore will not use hindsight to reassess conclusion on lease terms and impairment.

The Company has finalized its evaluation of the existing operating leases and the adoption of ASC 842 will have a material impact on the Company’s consolidated balance sheets due to the recognition of

significant right-of-use assets and lease liabilities.

The right-of-use assets and lease liabilities will be determined based on the present value of the future fixed lease payments, which are materially consistent with the future minimum

rental commitments for operating leases, as detailed in Note 23.

Additionally, upon adoption port access rights and initial lease costs, as detailed within Note 15, will be reclassified to the right-of-use assets.

We are finalizing our

incremental borrowing rate methodology that will be used in valuing the right of use assets and operating lease liabilities.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, including removing certain exceptions related to the general principles in ASU 740, Income Taxes .

ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes.

The new standard is effective for interim and annual periods beginning after December 15, 2020, and early adoption is permitted.

The Company will adopt ASC 2019-12 in the first quarter of 2021 and does not expect the adoption of this new standard to materially impact the Company’s financial position, results of operations or cash flows.

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06) .

ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

ASU 2020-06 requires entities to provide expanded disclosures about the terms and features of convertible instruments and amends certain guidance in ASC 260 on the computation of EPS for convertible instruments and contracts on an entity’s own equity.

ASU 2020-06 is effective for public companies for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption of all amendments in the same period permitted.

The Company is currently assessing the impact of adoption of this guidance.

New and amended standards adopted by the Company:

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Disclosure Framework – Measurement of Credit Losses on Financial Instruments

(“ASU 2016-13”), which requires financial assets measured at amortized cost basis, including trade receivables, to be presented net of the amount expected to be collected.

The measurement of all expected credit losses will be based on

historical experience, current conditions, and reasonable and supportable forecasts.

In October 2019, the FASB voted to approve a proposal to defer the effective date of ASC 2016-13 for certain entities, including emerging growth companies that

take advantage of the extended transition period, to fiscal years beginning after December 15, 2022.

This proposal would be applicable to the Company.

The Company is currently evaluating the impact of adopting this new guidance on its

consolidated financial statements and timing of adoption.

Disclosure Framework – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires financial assets measured at amortized cost basis, including trade receivables, to be presented net of the amount expected to be collected.

The measurement of all expected credit losses will be based on relevant information about the credit quality of customers, past events, including historical experience, and reasonable and supportable forecasts that affect the collectability of the reported amount.

Upon the loss of EGC status, ASU 2016-13 was adopted in the third quarter of 2020 with an effective date of January 1, 2020.

The Company elected to apply the modified retrospective transition method, which allowed the Company to begin recognizing and measuring current expected credit losses at January 1, 2020, without modifying the comparative period financial statements.

In connection with the adoption of ASC 2016-13, the Company recorded a transition adjustment of $ 228 which was recorded as an adjustment to retained earnings.

The Company recorded credit loss expense of $ 316 for the year ended December 31, 2020.

On February 25, 2016, the FASB issued ASU No.

2016-02, Leases (“ASC 842”), which amended the existing accounting standards for lease accounting, including requiring most leases to be recognized on a lessee’s balance sheet and making targeted changes to lessor accounting.

The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on the lease’s classification as a finance or operating lease.

However, unlike ASC 840, which required only capital leases to be recognized on the balance sheet, ASC 842 requires most leases to be recognized on the balance sheet as a ROU asset and a lease liability.

The Company adopted ASC 842 effective January 1, 2020 and elected to apply the modified retrospective transition method at the beginning of the period of adoption, which allowed the Company to begin recognizing and measuring leases under ASC 842 at January 1, 2020, without modifying the comparative period financial statements.

Upon adoption of ASC 842, the Company recorded ROU assets and corresponding lease liabilities of $ 124,774 and $ 103,874 , respectively.

The Company did not elect the package of practical expedients and therefore, as part of transition, the Company reassessed the previous conclusions made under ASC 840 related to the identification of leases, classification of leases and initial direct costs based on the standards of ASC 842.

In connection with the reassessment of previous conclusions, the Company determined that the direct financing lease recognized related to the Montego Bay Facility is no longer a lease under ASC 842.

The Company recognized a transition adjustment that removed the unamortized net investment in the direct financing lease and recognized the underlying assets as Property, plant and equipment, net of depreciation, that would have been recognized since the commissioning of the Montego Bay Facility, with the difference of approximately $ 9,085 , net of taxes of $ 2,945 , recorded as a reduction to retained earnings.

Beginning in 2020, the Company recognized payments previously allocated to the leasing component of the gas sales agreement with this customer within Operating revenue in the consolidated statements of operations and comprehensive loss.

Under ASC 840, amounts allocated to the leasing component had been recognized on an effective interest method over the lease term with only the portion representing interest income recognized as Other revenue.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU

2018-13”), which provides additional guidance to improve the effectiveness of disclosure requirements on fair value measurement.

The Company will adopt ASU 2018-13 for the year beginning January 1, 2020.

As this guidance is only related to

qualitative financial disclosures, it will not have a material impact on the Company’s consolidated financial statements.

Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which provides additional guidance to improve the effectiveness of disclosure requirements on fair value measurement.

The Company has adopted ASU 2018-13 for the year beginning January 1, 2020.

As this guidance is only related to qualitative financial disclosures, it did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a

Cloud Computing Arrangement That Is a Service Contract , which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation

costs to capitalize as assets.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets.

A customer’s accounting for the costs of the hosting component of the arrangement is not affected by the new guidance.

This ASU is effective for the Company on January 1, 2021, with early adoption permitted.

Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements and the timing of adoption.

New and amended standards adopted by the Company:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) which provides a single comprehensive model for recognizing revenue

from contracts with customers and supersedes existing revenue recognition guidance.

The new standard requires that a company recognize revenue when it transfers promised goods or services to customers in an amount that reflects the

consideration the company expects to receive in exchange for those goods or services.

The Company adopted ASC 606 on January 1, 2019 using the modified retrospective method, which required the Company to apply the new revenue standard to (i)

all new revenue contracts entered into after January 1, 2019 and (ii) all existing revenue contracts as of January 1, 2019 through a cumulative adjustment to the Company’s retained earnings balance.

The adoption of ASC 606 did not have any

impact on the Company’s historical retained earnings.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10):

Recognition and Measurement of Financial

Assets and Financial Liabilities (“ASU 2016-01”), which makes targeted improvements to the accounting for, and presentation and disclosure of, financial instruments.

ASU 2016-01 requires that most equity investments be measured at fair

value, with subsequent changes in fair value recognized in net income.

ASU 2016-01 does not affect the accounting for investments that would otherwise be consolidated or accounted for under the equity method.

The new standard also impacts

financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments.

The Company has adopted this guidance for the year beginning January 1, 2019 by recognizing an immaterial adjustment

to beginning retained earnings for the net unrealized loss on an equity investment with a readily determinable fair value.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230):

Classification of Certain Cash Receipts and Cash Payments ,

which provides guidance on eight specific cash flow issues with an intention to reduce the existing diversity in practice.

The Company has adopted this guidance for the year beginning January 1, 2019, and its adoption did not have a material

impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230):

Restricted Cash , which requires that statements

of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents.

This change is intended to limit the diversity in practice in the

treatment of restricted cash in the statement of cash flows.

The adoption of this standard resulted in the Company no longer showing the changes in restricted cash balances as a component of cash flows from investing or financing activities but

instead including the balances of both current and long-term restricted cash with cash and cash equivalents in total cash, cash equivalents and restricted cash for the beginning and end of the periods presented.

The Company has adopted this

guidance for the year beginning January 1, 2019.

In February 2018, the FASB issued ASU 2018-02, Income Statement:

Reporting Comprehensive Income (Topic 220) which allows a reclassification from accumulated other

comprehensive income (loss) to retained earnings for tax effects resulting from the comprehensive tax legislation enacted by the U.S.

government commonly referred to as the Tax Cuts and Jobs Act.

The Company has adopted this guidance for the

year beginning January 1, 2019.

The Company had no tax impacts recorded in accumulated other comprehensive income (loss) prior to adoption of the standard, and therefore adoption of the standard had no impact on the Company’s consolidated

financial statements.

In September 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation Improvements to Non-employee Share-Based Payment Accounting (“ASU 2018-07”), which simplifies

the accounting for share-based payments granted to non-employees for goods and services.

Under ASU 2018-07, most of the guidance on such payments to non-employees will be aligned with the requirements for share-based payments granted to

The Company has early adopted ASU 2018-07 upon inception of the Incentive Plan, and its adoption did not have a material impact on the Company’s consolidated financial statements.

The Company has early adopted ASU 2018-15 for the year beginning January 1, 2020, using the prospective transition approach.

This approach did not require any adjustment to comparative financial statements.

The Company has not capitalized a significant amount of implementation costs as a result of adopting this guidance in the year ended December 31, 2020, and the adoption did not result in material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

The guidance provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

The guidance was effective upon issuance and generally can be applied to applicable contract modifications and hedge relationships prospectively through December 31, 2022.

The adoption of this guidance did not have a significant impact on the Company’s financial statements.

Revenue from contracts with customers

Revenue recognized in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2019 and any associated balances on the consolidated balance sheet as of December 31, 2019 prepared under ASC

606 did not differ materially from what would have been presented under the previous revenue standard.

As such, no comparison for the results of operations for the year ended December 31, 2019 and the financial position as of December 31, 2019

under ASC 606 and ASC 605 has been presented.

Under most customer contracts, invoicing occurs once the Company’s performance obligations have been satisfied, at which point payment is unconditional.

Receivables related to revenue from contracts with customers totaled $30,563 as of

December 31, 2019 and were included in Receivables, net on the consolidated balance sheets, net of the allowance for doubtful accounts.

Other items included in Receivables, net not related to revenue from contracts with customers represent

receivables associated with leases which are accounted for outside the scope of ASC 606.

During the year ended December 31, 2019, the Company recognized a contract liability of $6,542.

The contract liability balance is comprised of unconditional payments due under the contract with a customer prior to the Company’s satisfaction

of the related performance obligations.

The performance obligations are expected to be recognized during the next 12 months, and the contract liability is classified within Other current liabilities on the consolidated balance sheets.

the year ended December 31, 2019, the Company recognized a contract asset of $23,261.

The contract asset is comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent

periods, and $3,787 is presented within Other current assets and $19,474 is presented within Other non-current assets based on the timing of the expected billing to the customer.

Contract assets or liabilities have not been previously

recognized, and as such, there are no other changes to contract balances within the current period.

The Company began to recognize revenue for development services revenue during the year ended December 31, 2019 within Other revenue in the consolidated statements of operations and comprehensive loss.

Costs recognized within Cost of sales

associated with development services were $24,228 for the year ended December 31, 2019.

As of December 31, 2020 and 2019 , receivables related to revenue from contracts with customers totaled $ 76,431 and $ 40,731 , respectively, and were included in Receivables, net on the consolidated balance sheets, net of current expected credit losses of $ 98 and $ 0 , respectively.

Other items included in Receivables, net not related to revenue from contracts with customers represent receivables associated with reimbursable costs and leases which are accounted for outside the scope of ASC 606 .

The Company has recognized contract liabilities, comprised of unconditional payments due or paid under the contracts with customers prior to the Company’s satisfaction of the related performance obligations.

The performance obligations are expected to be satisfied during the next 12 months, and the contract liabilities are classified within Other current liabilities on the consolidated balance sheets.

Contract assets are comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent periods.

The contract liabilities and contract assets balances as of December 31, 2020 and 2019 are detailed below:

December 31, 2020

December 31, 2019

Contract assets, net - current

Contract assets, net - non-current

Total contract assets, net

Contract liabilities

Revenue recognized in the year from:

Amounts included in contract liabilities at the beginning of the year

Contract assets are presented net of expected credit losses of $ 372 and $ 0 as of December 31, 2020 and 2019 , respectively.

As of December 31, 2020 , the Company has unbilled receivables, net of current expected credit losses, of $ 6,818 , of which $ 356 is presented within Other current assets and $ 6,462 is presented within Other non-current assets on the consolidated balance sheets.

These unbilled receivables represent unconditional right to payment subject only to the passage of time.

Operating revenue which includes revenue from sales of LNG and natural gas as well as outputs from the Company’s natural gas-fueled power generation facilities, including power and steam, was $ 318,311 , $ 145,500 and $ 96,906 for the years ended December 31, 2020, 2019 and 2018 respectively.

During March 2020 , the Company began to deliver power and steam recognizing $ 23,062 in operating revenue for the year ended December 31, 2020 .

Other revenue includes revenue for development services as well as lease and other revenue.

The table below summarizes the balances in Other revenue :

Year Ended December 31,

Other Revenue

Development services revenue

Lease related revenue

Lease and other revenue

Total other revenue

Development services revenue recognized in the year ended December 31, 2020 included $ 118,757 for the customer’s use of natural gas as part of commissioning their assets.

Transaction price allocated to remaining performance obligations

Some of the Company’s contracts are short-term in nature with a contract term of less than a year.

The Company applied the optional exemption not to disclose any transaction price allocated to unfulfilled performance obligations related to

these contracts.

The Company has arrangements in which LNG or natural gas is sold on a “take-or-pay” basis whereby the customer is obligated to pay for the minimum guaranteed volumes even if the customer does not take delivery.

The price under these

agreements is based on a market index plus a fixed margin.

The fixed transaction price allocated to the remaining performance obligations under these arrangements is $3,101,185 as of December 31, 2019, representing the fixed margin multiplied

by the outstanding minimum guaranteed volumes.

The Company expects to recognize this revenue over the following time periods, and the pattern of recognition reflects the minimum guaranteed volumes in each period:

For all other sales contracts that have a term exceeding one year, the Company has elected the practical expedient in ASC 606 under which the Company does not disclose the transaction price allocated to remaining performance obligations if

the variable consideration is allocated entirely to a wholly unsatisfied performance obligation.

For these excluded contracts, the sources of variability are (a) the fluctuating market index prices of natural gas used to price the contracts,

and (b) the variation in volumes that may be delivered to the customer.

Both sources of variability are expected to be resolved at or shortly before delivery of each unit of LNG or natural gas.

As each unit of LNG or natural gas represents a

separate performance obligation, future volumes are wholly unsatisfied.

During the year ended December 31, 2019, the Company began to incur costs to fulfill a contract with a significant customer.

These costs primarily consist of expenditures required to enhance resources to deliver under the agreement with the

The Company applied the optional exemption not to report any unfulfilled performance obligations related to these contracts.

The Company has arrangements in which LNG, natural gas or outputs from the Company’s power generation facilities are sold on a “take-or-pay” basis whereby the customer is obligated to pay for the minimum guaranteed volumes even if it does not take delivery.

The price under these agreements is typically based on a market index plus a fixed margin.

The fixed transaction price allocated to the remaining performance obligations under these arrangements is $ 4,357,054 as of December 31, 2020 , representing the fixed margin multiplied by the outstanding minimum guaranteed volumes.

The Company expects to recognize this revenue over the following time periods.

The pattern of recognition reflects the minimum guaranteed volumes in each period :

For these excluded contracts, the sources of variability are (a) the market index prices of natural gas used to price the contracts, and (b) the variation in volumes that may be delivered to the customer.

Both sources of variability are expected to be resolved at or shortly before delivery of each unit of LNG, natural gas, power or steam.

As each unit of LNG, natural gas, power or steam represents a separate performance obligation, future volumes are wholly unsatisfied.

The Company has recognized costs to fulfill a contract with a significant customer, which primarily consist of expenses required to enhance resources to deliver under the agreement with the customer.

As of December 31, 2020 , the Company has capitalized $ 11,276 , of which $ 588 of these costs is presented within Other current assets and $ 10,688 is presented within Other non-current assets on the consolidated balance sheets.

will be recognized over the expected customer life, beginning when the Company begins to deliver under the contract.

On November 9, 2018, the Company entered into an agreement to acquire the share capital of Shannon LNG Limited (“SLNG”) and Shannon LNG Energy Limited (“LNG Energy,” and, together with SLNG, “Shannon LNG”) in a

transaction accounted for as an asset acquisition.

On the same date, the Company acquired the Class A shares of Shannon LNG, representing a controlling financial interest.

Shannon LNG was previously formed to acquire and develop assets

comprising permissions, rights, licenses, leases, and other entitlements which would be used to construct and operate a terminal, pipeline, and related infrastructure, to import, process and deliver natural gas to downstream customers in

As of the date of acquisition, construction of the planned infrastructure had not commenced and the primary assets of Shannon LNG were comprised of land, wayleaves, and permits that would allow for future development.

The purchase agreement required the Company to pay the following amounts:

Contingent consideration (2)

Equity Agreement (3)

Transaction costs

Non-controlling interest

Total consideration

Cash inclusive of repayment of Shannon LNG’s liabilities equal to approximately $2,857.

Consideration due to sellers once the first gas is exported from the terminal to be built.

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.

The contingent consideration meets the definition of a derivative under ASC 815, Derivatives and Hedging .

for more detail;

the contingent consideration is recognized in Other long-term liabilities on the consolidated balance sheets as of December 31, 2019 and 2018.

The Equity Agreement is an unconditional

obligation and is recognized in Other current liabilities on the consolidated balance sheets as of December 31, 2019 and 2018.

The purchase agreement included put and call options to allow or require the Company to acquire the remaining ownership interest of Shannon LNG.

The options were deemed to be embedded equity-linked instruments within

the non-controlling interest that is recognized within permanent equity.

The fair value of the non-controlling interest was estimated to be $14,446 based on the strike price of the call and put options.

The assets acquired in connection with the acquisition were recorded by the Company at their estimated relative fair values as follows:

Indefinite life

Rights of way

Indefinite life

Intangible assets – favorable lease agreements

Intangible assets – permits

Total assets acquired

As of December 31, 2019 , the Company had capitalized $ 8,839 , of which $ 331 of these costs was presented within Other current assets and $ 8,508 was presented within Other non-current assets on the consolidated balance sheets.

In the first quarter of 2020 , the Company began delivery under the agreement and started recognizing these costs on a straight-line basis over the expected term of the agreement .

The Company has operating leases primarily for the use of LNG vessels, marine port space, office space, land and equipment under non-cancellable lease agreements.

The Company’s leases may include multiple optional renewal periods that are exercisable solely at the Company’s discretion.

Renewal periods are included in the lease term when the Company is reasonably certain that the renewal options would be exercised, and the associated lease payments for such periods are reflected in the ROU asset and lease liability.

The Company’s leases include fixed lease payments which may include escalation terms based on a fixed percentage or may vary based on an inflation index or other market adjustments.

Escalations based on changes in inflation indices and market adjustments and other lease costs that vary based on the use of the underlying asset are not included as lease payments in the calculation of the lease liability or ROU asset;

such payments are included in variable lease cost when the obligation that triggers the variable payment becomes probable.

Variable lease cost includes contingent rent payments for office space based on the percentage occupied by the Company in addition to common area charges and other charges that are variable in nature.

The Company also has a component of lease payments that are variable related to the LNG vessels, in which the Company may receive credits based on the performance of the LNG vessels during the period.

For the year ended December 31, 2020, the Company’s operating lease cost recorded within the consolidated statements of operations and comprehensive loss were as follows:

December 31 ,

Fixed lease cost

Variable lease cost

Short-term lease cost

Lease cost - Cost of sales

Lease cost - Operations and maintenance

Lease cost - Selling, general and administrative

For the year ended December 31, 2020, the Company has capitalized $ 10,457 of lease costs for vessels and port space used during the commissioning of development projects in addition to short-term lease costs for vessels chartered by the Company to bring inventory from a supplier’s facilities to the Company’s storage locations which are capitalized to inventory.

Cash paid for operating leases is reported in operating activities in the consolidated statements of cash flows.

Supplemental cash flow information related to leases was as follows for the year ended December 31, 2020:

December 31 ,

Operating cash outflows for operating lease liabilities

Right-of-use assets obtained in exchange for new operating lease liabilities

The future payments due under operating leases as of December 31, 2020 are as follows:

Operating Leases

Total lease payments

effects of discounting

Present value of lease liabilities

Current lease liability

Non-current lease liability

As of December 31, 2020, the weighted-average remaining lease term for all operating leases was 7.2 years.

Because the Company generally does not have access to the rate implicit in the lease, the incremental borrowing rate is utilized as the discount rate.

The weighted average discount rate associated with operating leases as of December 31, 2020 was 8.3 %.

Future annual minimum lease payments for operating leases as of December 31, 2019, prepared in accordance with accounting standards prior to the adoption of ASC 842, were as follows:

Year ending December 31 :

During the years ended December 31, 2019 and 2018, the Company recognized rental expense for all operating leases of $ 37,069 and $ 23,687 , respectively, related primarily to LNG vessel time charters, office space, a land site lease and marine port berth leases.

The Company has entered into several leases for ISO tanks that have not commenced as of December 31, 2020 with noncancelable terms of 5 years and including fixed payments of approximately $ 19 million.

In the Company’s agreements to sell LNG or natural gas to customers, the Company may also lease certain equipment to customers which are accounted for either as a finance or an operating lease.

Property, plant and equipment subject to operating leases is included within ISO containers and other equipment within Note 11.

Property, plant and equipment, net.

The following is the amount of property, plant and equipment that is leased to customers:

December 31 ,

Property, plant and equipment

Accumulated depreciation

Property, plant and equipment, net

The following table shows the expected future lease payments as of December 31, 2020, for 2021 through 2025 and thereafter:

Future cash receipts

Financing leases

Operating leases

Imputed interest

Present value of total lease receipts

Current finance leases, net

Non-current finance leases, net

Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs.

inputs are prioritized as follows:

These inputs are prioritized as follows:

Level 1 – observable inputs such as quoted prices in active markets for identical assets or liabilities.

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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

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).

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Consideration due to the sellers of Shannon LNG once first gas is supplied from the terminal to be built.

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.

The Company estimates fair value of the derivative liability and equity agreement using a discounted cash flows method with discount rates based on the average yield curve for bonds with similar

credit ratings and matching terms to the discount periods as well as a probability of the contingent event occurring.

The Company recorded a loss from fair value adjustments on the derivative liability and equity agreement of $121 and $0 within

Other income, net in the consolidated statements of operations and a gain of $280 and $0 within unrealized gain on currency translation adjustment in the Other comprehensive loss for the year ended December 31, 2019 and 2018, respectively.

During the year ended December 31, 2019 and 2018, the Company had no settlements of the equity agreement or derivative liability or any transfers in or out of Level 3 in the fair value hierarchy.

The Company estimates fair value of outstanding debt using a discounted cash flow method based on current market interest rates for debt issuances with similar remaining years to maturity and

adjusted for credit risk.

The Company has estimated that the carrying value for each of the Term Loan Facility, Senior Secured Bonds, and Senior Unsecured Bonds (all defined below in “Note 17.

Debt”) approximate fair value.

The fair value

estimate is classified as Level 3 in the fair value hierarchy.

To be paid at the earlier of agreed-upon date or the date on which the valid planning permission is received as specified in the amended Shannon LNG Agreement.

The Company estimates fair value of the derivative liability and equity agreement using a discounted cash flows method with discount rates based on the average yield curve for bonds with similar credit ratings and matching terms to the discount periods as well as a probability of the contingent event occurring.

The table below summarizes the fair value adjustment, recorded within Other expense (income), net in the consolidated statements of operations and comprehensive loss, and currency translation adjustment, recorded within the Other comprehensive loss, for the year ended December 31, 2020 and 2019:

Fair value adjustment - Loss

Currency translation adjustment - Loss/(gain)

During the years ended December 31, 2020 and 2019, the Company had no settlements of the equity agreement or derivative liability or any transfers in or out of Level 3 in the fair value hierarchy.

The liability associated with the equity agreement of $ 22,768 and $ 16,800 as of December 31, 2020 and 2019, respectively, is recorded within Other current liabilities on the consolidated balance sheets.

The liability associated with the derivative liability of $ 10,716 and $ 9,800 as of December 31, 2020 and 2019, respectively, is recorded within Other long-term liabilities on the consolidated balance sheets.

The Company estimates fair value of outstanding debt using quoted market prices.

The fair value of the Senior Secured Notes (defined below in “Note 15.

Debt”) was approximately $ 1,327,488 as of December 31, 2020.

The fair value estimate is classified as Level 2 in the fair value hierarchy.

Restricted cash

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LNG and natural gas inventory

ADO inventory

Materials, supplies and other

Automotive diesel oil inventory

Bunker fuel, materials, supplies and other

Total inventory

Inventory is adjusted to the lower of cost or net realizable value each quarter.

Changes in the value of inventory are recorded within Cost of sales in the

consolidated statements of operations and comprehensive loss.

The Company recorded an adjustment to the value of inventory of $251 during the year ended December 31, 2019.

No adjustments were recorded during the years ended December

31, 2018, and 2017.

Changes in the value of inventory are recorded within Cost of sales in the consolidated statements of operations and comprehensive loss.

The Company recorded an adjustment to the value of inventory of $ 0 , $ 251 and $ 0 during the years ended December 31, 2020, 2019 and 2018, respectively.

Prepaid expenses and other current assets

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Other current assets

Total prepaid expenses and other current assets

Other current assets as of December 31, 2019 primarily consists of capitalized costs associated with delivering development services to a customer and receivables for recoverable taxes.

Other current assets as of

December 31, 2018 primarily consists of IPO issuance costs incurred which were netted against issuance proceeds upon completion of the IPO.

Investment in equity securities

The Company has invested in equity securities of an international oil and gas drilling contractor.

The following tables present the number of shares, cost and fair value of the investment:

December 31, 2019

(in thousands of U.S.

dollars except shares)

Investment in equity securities¹

¹During the year ended December 31, 2019, the investee effected a 5-for-1 reverse stock split.

December 31, 2018

(in thousands of U.S.

dollars except shares)

Investment in equity securities

The movement in the value of the equity investment during the years ended December 31, 2019 and 2018 is summarized below:

Beginning of period

Unrealized loss

End of period

The unrealized loss of $1,116 for the year ended December 31, 2019 is included within Other income, net in the consolidated statements of operations and comprehensive loss.

The unrealized loss of

$2,677 for the year ended December 31, 2018 was included within unrealized loss on available-for-sale investment in the Other comprehensive loss.

Total prepaid expenses and other current assets, net

Other current assets as of December 31, 2020 and 2019 primarily consists of receivables for recoverable taxes.

Construction in progress

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Balance at end of period

Interest expense of $25,172, $1,732 and $0 was capitalized for the year ended December 31, 2019, 2018 and 2017, respectively, inclusive of amortized debt issuance costs disclosed in “Note 17.

Interest expense of $ 25,924 , $ 25,172 and $ 1,732 was capitalized for the years ended December 31, 2020, 2019 and 2018, respectively, inclusive of amortized debt issuance costs disclosed in “Note 15.

Property, plant and equipment, net

As of December 31, 2020 and 2019 the Company’s property, plant and equipment, net consisted of the following:

LNG liquefaction facilities

Terminal and power plant equipment

CHP facilities

Gas terminals

Gas pipelines

ISO containers and other equipment

LNG liquefaction facilities

Gas pipelines

Leasehold improvements

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Total property, plant and equipment, net

Depreciation for years ended December 31, 2019, 2018, and 2017 totaled $7,527, $3,900, and $3,214, respectively, of which $701, $713, and $453, respectively, is included within Cost of sales in

the consolidated statements of operations and comprehensive loss.

Depreciation for years ended December 31, 2020, 2019 and 2018 totaled $ 32,116 , $ 7,527 and $ 3,900 , respectively, of which $ 927 , $ 701 and $ 713 , respectively, is included within Cost of sales in the consolidated statements of operations and comprehensive loss.

Intangible assets, net

The following table summarizes the composition of intangible assets:

The following table summarizes the composition of intangible assets as of December 31, 2020 and 2019:

December 31, 2020

Gross Carrying

Weighted Average

Definite-lived intangible assets

Shannon LNG leases and permits

Shannon LNG permits

Indefinite-lived intangible assets

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Gross Carrying

Weighted Average

Definite-lived intangible assets

Shannon LNG leases and permits

Shannon LNG permits

Indefinite-lived intangible assets

Total intangible assets

As of December 31, 2019, the weighted average remaining amortization periods for the intangible assets is 38.8 years.

As of December 31, 2020 and 2019, the weighted-average remaining amortization periods for the intangible assets was 37.5 years and 38.8 years, respectively.

As of January 1, 2020, intangible assets associated with favorable lease terms in acquired leases have been reclassified as ROU assets as a result of adoption of ASC 842.

Amortization for the years ended December 31, 2020 and 2019 totaled $ 1,120 and $ 1,114 , respectively.

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Year ending December 31:

Finance leases, net

The Company placed its storage and regasification LNG terminal in Montego Bay, Jamaica into service on October 30, 2016, which has been accounted for as a direct financing lease.

In addition, the

Company has also entered into other arrangements to lease equipment to customers which are accounted for as direct financing leases.

The components of the direct financing leases as of December 31, 2019 and 2018 are as follows:

Finance leases

Unearned income

Total finance leases, net

Current portion

Receivables related to the Company’s direct financing leases are primarily with a national utility that generates consistent cash flow.

Therefore, the Company does not expect a material impact to

the results of operations or financial position due to nonperformance from such counterparty.

As of December 31, 2019, future minimum lease payments to be received under direct financing leases for the remainder of the respective lease terms is as follows:

Year ending December 31:

Other non-current assets

As of December 31, 2020 and 2019, other non-current assets consisted of the following:

Port access rights and initial lease costs

Nonrefundable deposit

Upfront payments to customers

Contract asset (Note 4)

Contract asset, net (Note 4)

Cost to fulfill (Note 4)

Total other non-current assets

Port access rights related to the Company’s port lease in Baja California Sur, Mexico, represent upfront payments to enter the lease and are amortized straight-line over the lease term as

additional rent expense.

Initial lease costs represent payments made to previous lessees to secure the Company’s port lease in San Juan, Puerto Rico and are also amortized straight-line over the lease term.

Nonrefundable deposits are primarily

related to deposits for planned land purchases in Ireland and Pennsylvania.

Upfront payments to customers consist of amounts the Company has paid in relation to two natural gas sales contracts with customers to construct

fuel-delivery infrastructure that the customers will own.

Unbilled receivables, net (Note 4)

Upfront payments to customers

Port access rights and initial lease costs

Total other non-current assets, net

Nonrefundable deposits are primarily related to deposits for planned land purchases in Pennsylvania and Ireland.

Upfront payments to customers consist of amounts the Company has paid in relation to two natural gas sales contracts with customers to construct fuel-delivery infrastructure that the customers will own.

Other includes upfront payments to our service providers, a long-term refundable deposit and investments in equity securities.

During the fourth quarter of 2020 , the Company invested $ 1,000 in a hydrogen technology development company through a Simple Agreement for Future Equity (“SAFE”) that will convert to preferred shares upon completion of a qualified financing by the investee, and this amount is classified within other in the table above.

As of January 1, 2020 , port access rights related to the Company’s port lease in Baja California Sur, Mexico, and payments to incumbent tenants to secure the Company’s port lease in San Juan, Puerto Rico were reclassified as ROU assets in connection with the adoption of ASC 842 .

Accrued liabilities

As of December 31, 2020 and 2019 accrued liabilities consisted of the following:

Accrued construction costs

Accrued IPO costs

Accrued development costs

Accrued interest

Accrued bonuses

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As of December 31, 2020 and 2019, debt consisted of the following:

Senior Secured Notes, due September 15, 2025

Term Loan Facility, due January 21, 2020

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Senior Unsecured Bonds, due September 2036

Current portion of debt

Non-current portion of debt

Senior Secured Notes

On September 2, 2020 , the Company issued $ 1,000,000 of 6.75 % senior secured notes in a private offering pursuant to Rule 144 A under the Securities Act (the “Senior Secured Notes”).

Interest is payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2021 ;

no principal payments are due until maturity on September 15, 2025 .

The Company may redeem the Senior Secured Notes, in whole or in part, at any time prior to maturity, subject to certain make-whole premiums.

The Senior Secured Notes are guaranteed, jointly and severally, by certain of the Company’s subsidiaries, in addition to other collateral.

The Senior Secured Notes may limit the Company’s ability to incur additional indebtedness or issue certain preferred shares, make certain payments, and sell or transfer certain assets subject to certain financial covenants and qualifications.

The Senior Secured Notes also provide for customary events of default and prepayment provisions.

The Company used a portion of the net cash proceeds received from the Senior Secured Notes to repay in full the outstanding principal and interest under the Credit Agreement (as defined below), including related costs and expenses.

The Company also used the remaining net proceeds, together with cash on hand, to redeem in full the outstanding Senior Secured Bonds and Senior Unsecured Bonds (as defined below), including related premiums, costs and expenses, terminating the Senior Secured Bonds and Senior Unsecured Bonds.

The Company completed the redemption of the Senior Secured Bonds and Senior Unsecured Bonds on September 21, 2020 .

In connection with the issuance of the Senior Secured Notes, the Company incurred $ 17,937 in origination, structuring and other fees.

Issuance costs of $ 13,909 were deferred as a reduction of the principal balance of the Senior Secured Notes on the consolidated balance sheets;

unamortized deferred financing costs related to lenders in the Credit Agreement that participated in the Senior Secured Notes were $ 6,501 and such unamortized costs were also included as a reduction of the principal balance of the Senior Secured Notes and will be amortized over the remaining term of the Senior Secured Notes.

As a portion of the repayment of the Credit Agreement was a modification, the Company recorded $ 4,028 of third -party fees in Selling, general and administrative in the consolidated statements of operations and comprehensive loss.

On December 17, 2020 , the Company issued $ 250,000 of additional notes on the same terms as the Senior Secured Notes in a private offering pursuant to Rule 144 A under the Securities Act (subsequent to this issuance, these additional notes are included in the definition of Senior Secured Notes herein).

Proceeds received included a premium of $ 13,125 , which was offset by additional financing costs incurred of $ 4,188 .

As of December 31, 2020 , total remaining unamortized deferred financing costs were $ 10,439 .

The Credit Agreement

On January 10, 2020 , the Company entered into a credit agreement to borrow $ 800,000 in term loans (the “Credit Agreement”).

The Credit Agreement was set to mature in January 2023 with the full principal balance due upon maturity.

Interest was payable quarterly and was based on a LIBOR rate divided by one minus the applicable reserve requirement, subject to a floor of 1.50 % , plus a margin of 6.25 % .

The interest rate margin was to increase each year of the term by 1.50 % .

A portion of the proceeds received were utilized to extinguish the Term Loan Facility (defined below), including outstanding principal of $ 495,000 .

The Credit Agreement was secured by mortgages on certain properties owned by the Company’s subsidiaries, in addition to other collateral.

The Company was required to comply with certain financial covenants and other restricted covenants customary for credit agreements of this type, including restrictions on indebtedness, liens, acquisitions and investments, restricted payments and dispositions.

The Credit Agreement also provided for customary events of default, prepayment and cure provisions.

In connection with obtaining the Credit Agreement and the extinguishment of the Term Loan Facility, the Company incurred $ 37,051 in origination, structuring and other fees which were recognized as a reduction of the principal balance of the Credit Agreement on the consolidated balance sheets.

On September 2, 2020 , the Company repaid the full amount outstanding using proceeds from the Senior Secured Notes.

Certain lenders in the Credit Agreement participated in the issuance of the Senior Secured Notes, and a portion of the repayment of the Credit Agreement was treated as a debt modification.

For the portion of the Credit Agreement that was considered extinguished, $ 16,310 of unamortized deferred debt issuance costs was recognized as a loss on extinguishment of debt in the consolidated statements of operations and comprehensive loss.

The remaining unamortized deferred debt issuance costs of $ 6,501 will be amortized over the remaining term of the Senior Secured Notes.

Term Loan Facility

On August 16, 2018, the Company entered into a credit agreement with a syndicate of two lenders to borrow up to an aggregate principal amount of $240,000, and proceeds received from this credit agreement were

utilized to repay prior debt facilities.

Company had an outstanding principal balance of $280,000 under the Term Loan Facility.

On August 16, 2018, the Company entered into a credit agreement with a syndicate of two lenders to borrow up to an aggregate principal amount of $ 240,000 , and proceeds received from this credit agreement were utilized to repay prior debt facilities.

On December 31, 2018, the Company amended this credit agreement to increase the available borrowing principal amount to $ 500,000 (as amended, the “Term Loan Facility”), and as of December 31, 2018, the Company had an outstanding principal balance of $ 280,000 under the Term Loan Facility.

On March 21, 2019, the Company drew an additional $ 220,000 , bringing the Company’s total outstanding borrowings to $ 500,000 under the Term Loan Facility.

All borrowings under the Term Loan Facility bore interest at a rate selected by the Company of either (i) LIBOR divided by one minus the applicable reserve requirement plus a spread

of 4% or (ii) subject to a floor of 1%, a Base Rate equal to the higher of (a) the Prime Rate, (b) the Federal Funds Rate plus 1/2 of 1% or (c) the 1-month LIBOR rate plus 1.00% plus a spread of 3.0%.

The Term Loan Facility was repayable in

quarterly installments of $1,250, with a balloon payment due at maturity.

All borrowings under the Term Loan Facility bore interest at a rate selected by the Company of either (i) LIBOR divided by one minus the applicable reserve requirement plus a spread of 4 % or (ii) subject to a floor of 1 %, a Base Rate equal to the higher of (a) the Prime Rate, (b) the Federal Funds Rate plus 1/2 of 1 % or (c) the 1-month LIBOR rate plus 1.00 % plus a spread of 3.0 %.

The Term Loan Facility was repayable in quarterly installments of $ 1,250 with a balloon payment due at maturity.

The Term Loan Facility was secured by mortgages on certain properties owned by the Company’s subsidiaries, in addition to other collateral.

The Term Loan Facility was amended in the third quarter

of 2019 to allow certain properties of a consolidated subsidiary to secure the Senior Secured Bonds (defined below).

The Company was required to comply with certain financial covenants and other restrictive covenants customary for facilities of

this type, including restrictions on indebtedness, liens, acquisitions and investments, restricted payments, and dispositions.

The Term Loan Facility also provided for customary events of default, prepayment, and cure provisions.

In connection with obtaining the Term Loan Facility and the extinguishment of the Company’s prior debt facilities, the Company paid $22,422 in origination and other fees.

A portion of refinanced

borrowings and associated fees were accounted for as a debt modification, while the remaining refinanced borrowings and associated were accounted for as a debt extinguishment.

As such, the Company also recognized a Loss on extinguishment of

debt of $9,568 in the consolidated statements of operations and comprehensive loss, including the write-off $2,820 of unamortized deferred financing costs and $6,380 of financing fees incurred in connection with the amendment of the Term Loan

the remaining loss on extinguishment was due to unamortized deferred financing costs and other fees incurred in conjunction with the repayment of prior debt facilities.

Of the fees incurred, the Company recognized $9,746 as a

reduction of the principal balance on the consolidated balance sheets.

As of December 31, 2018, the remaining unamortized deferred financing costs were $7,808.

In 2019, the Company paid $4,400 of additional fees in connection with the $220,000

draw on the Term Loan Facility.

These fees were capitalized as a reduction to the Term Loan Facility on the consolidated balance sheets, and all deferred financing costs associated with the Term Loan Facility were amortized over the term of the

Term Loan Facility, through December 31, 2019.

The Term Loan Facility was amended in the third quarter of 2019 to allow certain properties of a consolidated subsidiary to secure the Senior Secured Bonds.

The Company incurred costs in connection with obtaining the Term Loan Facility, the extinguishment of the Company’s prior debt facilities and the amendment of the Term Loan Facility.

Some of the costs incurred were capitalized as a reduction to the Term Loan Facility on the consolidated balance sheets, and all deferred financing costs associated with the Term Loan Facility were amortized over the term of the Term Loan Facility, through December 31, 2019.

As such, there were no unamortized deferred financing costs as of December 31, 2019.

The Term Loan Facility had a maturity date of December 31, 2019, with an option to extend the maturity date for two

additional six-month periods.

The Term Loan Facility had a maturity date of December 31, 2019 with an option to extend the maturity date for two additional six-month periods.

Upon the exercise of each extension option, the Company would pay a fee equal to 1.0 % of the outstanding principal balance at the time of the exercise and the spread on LIBOR and Base Rate would increase by 0.5 % .

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no fees were due to lenders from the execution of this amendment.

Prior to this new

maturity date, the Company repaid the full amount outstanding using proceeds from the Credit Agreement (as defined in Note 27 below) to extinguish the Term Loan Facility.

The Credit Agreement matures in January 2023, and as the borrowings

under the Credit Agreement are long term in nature, the outstanding principal balance of the Term Loan Facility as of December 31, 2019 has been presented as a non-current liability.

On January 15, 2020, the Company repaid the full amount outstanding including fees due to the lenders using proceeds from the Credit Agreement to extinguish the Term Loan Facility.

In conjunction with the extinguishment of the Term Loan Facility, the Company recognized a Loss on extinguishment of debt of $ 9,557 in the consolidated statements of operations and comprehensive loss .

South Power Bonds

On September 2, 2019, NFE South Power Holdings Limited (“South Power”), a consolidated subsidiary of the Company, entered into a facility for the issuance of secured and unsecured bonds (the

“Senior Secured Bonds” and “Senior Unsecured Bonds”, respectively) and subsequently issued $73,317 and $43,683 in Senior Secured Bonds and Senior Unsecured Bonds, respectively.

The Senior Secured Bonds are secured by the dual-fired combined

heat and power facility in Clarendon, Jamaica (the “CHP Plant”) and related receivables and assets, and the proceeds will be used to fund the completion of the CHP Plant and to reimburse shareholder advances.

In the fourth quarter of 2019,

South Power issued an additional $63,000 in Senior Secured Bonds.

On September 2, 2019, NFE South Power Holdings Limited (“South Power”), a consolidated subsidiary of the Company, entered into a facility for the issuance of secured and unsecured bonds (the “Senior Secured Bonds” and “Senior Unsecured Bonds”, respectively) and subsequently issued $ 73,317 and $ 43,683 in Senior Secured Bonds and Senior Unsecured Bonds, respectively.

The Senior Secured Bonds were secured by the dual-fired combined heat and power facility in Clarendon, Jamaica (the “CHP Plant”) and related receivables and assets, and the proceeds were used to fund the completion of the CHP Plant and to reimburse shareholder advances.

Upon completion of construction of the CHP Plant in the fourth quarter of 2019, South Power issued an additional $ 63,000 in Senior Secured Bonds.

The Company received $ 10,856 of the proceeds in 2019 and received the remaining proceeds of $ 52,144 in January 2020.

The Senior Secured Bonds bear interest at an annual fixed rate of 8.25% and will mature 15 years from the closing date of each issuance.

No principal payments will be due for the first seven

After seven years, quarterly principal payments of approximately 1.6% of the original principal amount will be due with a 50% balloon payment due upon maturity.

Interest payments on outstanding principal balances will be due quarterly.

The Senior Unsecured Bonds bear interest at an annual fixed rate of 11.00% and will mature in September 2036.

No principal payments will be due for the first nine years.

Beginning in 2028,

principal payments will be due quarterly on an escalating schedule.

Interest payments on outstanding principal balances will be due quarterly.

South Power will be required to comply with certain financial covenants as well as customary affirmative and negative covenants, including limitations on incurring additional indebtedness.

facility also provides for customary events of default, prepayment, and cure provisions.

The Senior Secured Bonds bore interest at an annual fixed rate of 8.25 % and matured 15 years from the closing date of each issuance.

No principal payments were due for the first seven years.

After seven years , quarterly principal payments of approximately 1.6 % of the original principal amount were due, with a 50 % balloon payment due upon maturity.

Interest payments on outstanding principal balances were due quarterly.

The Senior Unsecured Bonds bore interest at an annual fixed rate of 11.00 % and matured in September 2036 .

No principal payments were due for the first nine years .

Beginning in 2028, principal payments were due quarterly on an escalating schedule.

Interest payments on outstanding principal balances were due quarterly.

South Power was required to comply with certain financial covenants as well as customary affirmative and negative covenants, including limitations on incurring additional indebtedness.

The facility also provided for customary events of default, prepayment and cure provisions.

The Company paid approximately $ 3,892 of fees in connection with the issuance of Senior Secured Bonds and Senior Unsecured Bonds.

These fees were capitalized on a pro-rata basis as a reduction of

the Senior Secured Bonds and Senior Unsecured Bonds on the consolidated balance sheets.

The total unamortized deferred financing costs as of December 31, 2019 was $3,799.

Under the terms of the facility, South Power is required to maintain a Debt Service Reserve Account (as defined in the facility) in the amount of $8,299.

Such amount is included as a component of

Restricted cash on the Company’s consolidated balance sheets (see Note 7).

These fees were capitalized on a pro-rata basis as a reduction of the Senior Secured Bonds and Senior Unsecured Bonds on the consolidated balance sheets.

On September 21, 2020 , the Company repaid the full amount outstanding including fees dues to the lenders using proceeds from the Senior Secured Notes and cash on hand.

In conjunction with the repayment of the Senior Secured Bonds and Senior Unsecured Bonds, the Company recognized a loss on extinguishment of debt of $ 7,195 in the consolidated statements of operations and comprehensive loss, including the write-off of $ 3,594 of unamortized deferred financing costs and prepayment premium paid to bondholders of $ 3,601 .

Interest Expense

Interest and related amortization of debt issuance costs recognized during major development and construction projects are capitalized and included in the cost of the project.

Interest expense,

net of amounts capitalized, recognized for the year ended December 31, 2019, 2018, and 2017 consisted of the following:

Interest expense, net of amounts capitalized, recognized for the years ended December 31, 2020, 2019 and 2018 consisted of the following:

Year Ended December 31,

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Total interest expense

In connection with the IPO, NFE contributed the net proceeds from the IPO to NFI in exchange for NFI LLC Units, and NFE became the managing member of NFI.

NFI is a limited liability company that is treated as a partnership for U.S.

income tax purposes and for most applicable state and local income tax purposes.

As a partnership, NFI is not subject to U.S.

In connection with the IPO, NFE LLC contributed the net proceeds from the IPO to NFI in exchange for NFI LLC Units, and NFE LLC became the managing member of NFI.

NFI is a limited liability company that was treated as a partnership through December 31, 2020 for U.S.

federal income tax purposes and for most applicable state and local income tax purposes.

As a partnership, NFI was not subject to U.S.

federal and certain state and local income taxes.

Any taxable income or loss generated by NFI is passed through to and

included in the taxable income or loss of its members, including NFE, on a pro rata basis, subject to applicable tax regulations.

Any taxable income or loss generated by NFI was passed through to and included in the taxable income or loss of its members, on a pro rata basis, subject to applicable tax regulations.

NFE is subject to U.S.

federal income taxes, in addition to state and local income taxes, with respect to its

allocable share of any taxable income or loss of NFI.

federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of NFI.

Additionally, NFI and its subsidiaries are subject to income taxes in the various foreign jurisdictions in which they operate.

In connection with the IPO, NFE recorded a deferred tax asset of $ 42,783 related to the difference between its tax basis in its investment in NFI and NFE’s share of the financial statement carrying amount of the net assets of NFI.

deferred tax asset was recorded to equity and is fully offset by a valuation allowance also recorded to equity.

The deferred tax asset was recorded to equity and is fully offset by a valuation allowance also recorded to equity.

Subsequent to the Exchange Transactions completed on June 10, 2020, 100 % of NFI’s operations are included in the NFE income tax provision;

there was no impact on income tax expense due to the Exchange Transactions.

Additionally, in the third quarter of 2020, the Company completed the Conversion;

NFE LLC has been a corporation for U.S.

federal tax purposes, and converting NFE LLC from a limited liability company to a corporation has no effect on the U.S.

federal tax treatment of the Company or its shareholders.

The components of the Company’s loss before income taxes for the years ended December 31, 2020, 2019, and 2018 were as follows:

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Total provision for (benefit from) income taxes

Prior to the IPO, the income tax expense (benefit) was primarily due to foreign taxes.

Subsequent to the IPO, federal income taxes were also provided related to the Company’s allocable share of income (losses) from NFI at the prevailing U.S.

federal, state, and local corporate income tax rates.

As New Fortress Energy Holdings, NFE’s predecessor for accounting purposes, was organized as a partnership for U.S.

tax purposes, no United States federal income taxes were incurred in the

years ended December 31, 2018 and 2017.

Effective Tax Rate

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Income tax at the statutory rate

Impact from foreign operations

Foreign tax rate differential

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Foreign permanent adjustments

Income attributable to non-controlling interest

Domestic valuation allowance

Foreign valuation allowance

Domestic valuation allowance

Income attributable to non-controlling interest

Effective income tax rate

The primary items which decreased the Company’s effective income tax rate from the federal statutory rate in 2019 were increases in domestic and foreign valuation allowances and income attributable to non-controlling interests.

During the years ended December 31, 2019, 2018, and 2017, the Company did not have any unrecognized tax benefits.

The primary items which decreased the Company’s effective income tax rate from the federal statutory rate in 2020 and 2019 were increases in domestic and foreign valuation allowances and income attributable to non-controlling interests.

For 2018, the entire difference between the statutory and effective rate was attributable to foreign taxes.

During the years ended December 31, 2020, 2019 and 2018, the Company did no t have any unrecognized tax benefits.

The following table summarizes the changes in the Company’s valuation allowance on deferred tax assets for the period indicated for the years ended December 31, 2020 and 2019:

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Balance at the beginning of the period

Increase recognized in the statement of operations

Change in valuation allowance

Balance at the end of the period

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Accrued interest

IRC Section 163(j) interest carryforward

Federal and state net operating loss carryforward

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Share-based compensation

Lease liability

Total deferred tax assets

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Total deferred tax liabilities

Net deferred tax (liabilities) assets

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law.

The Tax Act includes significant changes to the U.S.

corporate income tax structure, including a federal corporate rate reduction from 35% to 21%

effective January 1, 2018, limitations on the deductibility of interest expense, establishing a deduction for foreign-derived intangible income (“FDII”), creation of new minimum taxing regimes such as the Base Erosion and Anti-abuse Tax

(“BEAT”) and the Global Intangible Low Taxed Income (“GILTI”) tax.

Because of the Company’s overall loss position and deferred tax asset valuation allowance, the above mentioned items have not had a material impact to the financial

Net deferred tax liabilities

Federal and State Jurisdictions

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federal and various state and local jurisdictions.

The Company is not currently under income tax examination in any jurisdiction, and NFE will file its first corporate U.S.

The Company is not currently under income tax examination in any jurisdiction, and NFE filed its first corporate U.S.

federal and state income tax returns for the period ended December 31, 2019.

NFI is taxed as a U.S.

partnership and controls the underlying operations, thus the tax effects of temporary differences are captured within the net deferred tax asset

for the investment in the partnership.

NFI was taxed as a U.S.

partnership and controlled the underlying operations, thus the tax effects of temporary differences were captured through December 31, 2020 within the net deferred tax asset for the investment in the partnership.

As of December 31, 2020, NFE has approximately $ 147,928 of federal and $ 30,661 of state net operating loss carry forwards.

The federal net operating losses are generally allowed to be carried forward indefinitely and can offset up to 80

percent of future taxable income.

The federal net operating losses are generally allowed to be carried forward indefinitely and can offset up to 80 percent of future taxable income.

The state net operating losses relate to Florida and are generally allowed to be carried forward indefinitely.

Under the provisions of Internal Revenue Code Section 382, certain substantial changes in the Company’s ownership may result in a limitation on the amount of U.S.

net operating loss carryforwards that can be utilized annually to offset future taxable income and taxes payable.

A portion of the Company’s net operating loss carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code.

NFE recorded a valuation allowance against its U.S.

federal and state deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized.

As of December 31, 2019, the Company concluded,

based on the weight of all available positive and negative evidence, those deferred tax assets are not more likely than not to be realized and accordingly, a valuation allowance has been recorded on this deferred tax asset as of December 31,

2019 for the amount not supported by reversing taxable temporary differences.

As of December 31, 2020, the Company concluded, based on the weight of all available positive and negative evidence, those deferred tax assets are not more likely than not to be realized and accordingly, a valuation allowance has been recorded on this deferred tax asset as of December 31, 2020 for the amount not supported by reversing taxable temporary differences.

The Company has not recorded any deferred tax liabilities for undistributed earnings of controlled foreign corporations, primarily consisting of the Company’s Puerto Rican operations.

The Company’s intent is to only make distributions from non-U.S.

subsidiaries in the future when distributions can be made at no net tax cost;

any remaining cash will be reinvested to grow operations in such subsidiaries.

The Company has no material unremitted earnings from its non-U.S.

subsidiaries.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, which includes various income and payroll tax provisions, was signed into law by the U.S.

In addition, various other coronavirus tax relief initiatives have been implemented around the world.

This tax legislation did not have a material impact on the Company’s financial position, results of operations or cash flows for the year ended December 31, 2020.

Foreign Jurisdictions

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As of December 31, 2020, NFI’s foreign subsidiaries have approximately $ 86,176 of net operating loss carry forwards.

Net operating losses of $60,699

incurred in Jamaica are generally allowed to be carried forward indefinitely.

Net operating losses of $ 64,819 incurred in Jamaica are generally allowed to be carried forward indefinitely.

Net operating loss carryforwards of $ 11,830 incurred in Puerto Rico and Mexico will expire, if unused, between 2028 and 2029.

Net operating loss carryforwards of

$3,946 incurred in Ireland are generally allowed to be carried forward indefinitely.

The Company recorded a valuation allowance against foreign deferred tax assets to reduce the net carrying value to an amount that it believes is more likely

than not to be realized.

Net operating loss carryforwards of $ 8,865 incurred in Ireland are generally allowed to be carried forward indefinitely.

The Company commenced operations in Puerto Rico during the year ended December 31, 2020 giving rise to cumulative profits, and the valuation allowance against a portion of the net deferred tax asset has been released.

The Company recorded a valuation allowance against other foreign deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized.

The Company has subsidiaries incorporated in Bermuda.

Under current Bermuda law, the Company is not required to pay taxes in Bermuda on either income or capital gains.

The Company has received an undertaking from the

Bermuda government that, in the event of income or capital gain taxes being imposed, it will be exempted from such taxes until the period 2035.

The Company has received an undertaking from the Bermuda government that, in the event of income or capital gain taxes being imposed, it will be exempted from such taxes until 2035.

Commitments and contingencies

In conjunction with its principal business activities, the Company enters into various firm commitments for the purchase, production, and transportation of LNG and natural gas.

The estimated

future cash payments related to outstanding contractual commitments, at market prices as of December 31, 2019, is summarized as follows:

LNG inventory purchases

Gas inventory purchases

LNG and natural gas purchases

In conjunction with its principal business activities, the Company enters into various firm commitments for the purchase, production, and transportation of LNG and natural gas, as well as engineering, procurement and construction agreements to develop the Company’s terminals and related infrastructure.

The estimated future cash payments related to outstanding contractual commitments, at market prices as of December 31, 2020, is summarized as follows:

Purchase obligations

The future cash payments summarized above represent the Company’s minimum firm purchase commitments as of December 31, 2020.

The 2020 commitment for LNG inventory purchases excludes the $7,097

prepaid balance as of December 31, 2019.

The amounts disclosed above represent the commitment to purchase 25 firm cargoes representing approximately 875.5 million gallons of LNG (72.4 million MMBtu).

As of December 31, 2019, the Company was a party to contractual purchase commitments for feedgas with remaining terms of up to 5 years.

These commitments are designed to assure sources of supply

and are not expected to be in excess of normal requirements.

In 2020, the Company entered into four LNG supply agreements for the purchase of 415 TBtu of LNG between 2021 and 2030.

Between 2022 and 2025, the total annual commitment under these agreements is approximately 68 TBtu per year, reducing to approximately 28 TBtu per year from 2026 to 2029.

The amounts disclosed above also include the commitment to purchase 12 firm cargoes in 2021 under a supply contract entered into in December 2018.

The Company has a contractual purchase commitment for feedgas with a remaining term of approximately five years .

This commitment is designed to assure sources of supply and is not expected to be in excess of normal requirements.

For agreements for supply where there is an active market, such agreements qualify for and the Company has elected the normal purchase exception under the derivatives guidance;

therefore, the purchases under these contracts are included in Inventory and Cost of sales as incurred.

In February 2020, the Company signed a long-term supply agreement for the purchase of 27.5 TBtu per year of LNG.

The purchases will take place between 2022 and 2030, and commitments related to

this agreement are not included in the table above.

The Company’s lease obligations are discussed in Note 23, Leases, as lessee.

The Company’s lease obligations are discussed in Note 5.

Contingencies

During 2017, the Company paid $1,204 of tangible personal property tax levied in the State of Florida in respect to the Company’s LNG Plant in Hialeah, Florida and subsequently initiated legal

proceedings to challenge the tax amount for a full or partial rebate.

The Company successfully challenged the tax amount and received a full rebate.

The State of Florida appealed the determination and the Company repaid the rebate amount in

order to avoid penalties and charges while the appeal is under consideration.

Additionally, in 2018, the Company paid $1,033 of tangible personal property taxes to the State of Florida with respect to the same LNG plant.

The Company initiated

legal proceedings to challenge the tax amount for a partial rebate and received a rebate of approximately $140.

The State of Florida appealed the determination, and the Company repaid the rebate amount to avoid penalties and charges while the

appeal was under consideration.

In 2019, the Company settled both cases with the State of Florida and expects to receive an estimated refund in the amount of $488, net of legal fees contingent upon the recovery of these property

The refund will be recognized as a gain contingency when the cash is received.

The Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business.

The Company does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Earnings per share

December 31, 2020

December 31, 2019

net loss attributable to non-controlling interests

Net loss attributable to Class A shares

Net loss attributable to Class A common stock

Weighted-average shares-basic and diluted

Net loss per share - basic and diluted

In connection with the IPO, New Fortress Energy Holdings, the Company’s predecessor, effected a one-for-2.16 share split of its issued and outstanding common shares, resulting in 147,058,824 common shares.

reorganization, New Fortress Energy Holdings obtained the same number of Class B shares in NFE.

Class B shares do not share in the earnings or losses of the Company and are therefore not participating securities.

As such, separate presentation

of basic and diluted net loss per share for Class B shares under the two-class method has not been presented.

In connection with the closing of the Exchange Transactions on June 10, 2020 , all outstanding Class B shares were exchanged for Class A shares.

The weighted average shares outstanding for the year ended December 31, 2020 are significantly lower than the Class A common stock outstanding on December 31, 2020 due to the timing of the Exchange Transactions.

The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the periods presented because its effects would have been anti-dilutive.

December 31, 2020

December 31, 2019

Unvested RSUs1

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Class B shares at the end of the period are considered potentially dilutive Class A shares.

Class A shares that would be issued in relation to the Shannon LNG Equity agreement.

Class A common stock that would be issued in relation to the Shannon LNG Equity Agreement.

Share-based compensation

During the year ended December 31, 2019, the Company granted RSUs to select officers, employees, non-employee members of the board of directors, and select non-employees under the Incentive Plan.

The Company estimates the fair value of RSUs on the grant date based on the closing price of the underlying shares on the grant date and other fair value adjustments to account for a post-vesting holding period.

fair value adjustments were estimated based on the Finnerty model.

The Company has granted RSUs to select officers, employees, non-employee members of the board of directors and select non-employees under the Incentive Plan.

The fair value of RSUs on the grant date is estimated based on the closing price of the underlying shares on the grant date and other fair value adjustments to account for a post-vesting holding period.

These fair value adjustments were estimated based on the Finnerty model.

The following table summarizes the RSU activity for the year ended December 31, 2020:

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Non-vested RSUs as of December 31, 2019

Vested and shares issued

Non-vested RSUs as of December 31, 2020

During the year ended December 31, 2019, the Company recognized a compensation expense of $41,447 of which $40,594 and $853 are recorded in Selling, general and administrative and Operations and maintenance,

respectively.

The Company recognizes the income tax benefits resulting from vesting of RSUs in the period they vest, to the extent the compensation expense has been recognized.

For the year ended December 31, 2019, cumulative compensation expense recognized for forfeited awards of $2,248 was reversed.

As of December 31, 2019, the Company had 3,137,415 non-vested RSUs subject to service conditions and therefore had unrecognized compensation costs of approximately $18,080.

The non-vested RSUs will vest over a period

from ten months to three years following the grant date.

The following table summarizes the share-based compensation expense for the Company’s RSUs recorded for the year ended December 31, 2020 and 2019 :

Year Ended December 31,

Operations and maintenance

Selling, general and administrative

Total share-based compensation expense

For the years ended December 31, 2020 and 2019 , cumulative compensation expense recognized for forfeited RSU awards of $ 914 and $ 2,248 , respectively, was reversed.

The Company recognizes the income tax benefits resulting from vesting of RSUs in the period of vesting, to the extent the compensation expense has been recognized.

As of December 31, 2020 , the Company had 1,538,060 non-vested RSUs subject to service conditions and had unrecognized compensation costs of approximately $ 8,211 .

The non-vested RSUs will vest over a period from ten months to three years following the grant date.

The weighted-average remaining vesting period of non-vested RSUs totaled 1.03 years as of December 31, 2020 .

Performance Share Units (“PSUs”)

During the first quarter of 2020 , the Company granted 1,109,777 PSUs to certain employees and non-employees.

The PSUs contain a performance condition, and vesting will be determined based on achievement of a performance metric for the year ended December 31, 2021 .

The number of shares that will vest can range from zero to 2,219,554 .

For the year ended December 31, 2020 , the Company determined that it was not probable that the performance condition required for any of the PSUs to vest would be achieved, and as such, no compensation expense has been recognized in the consolidated statements of operations and comprehensive loss.

Unrecognized compensation costs if the maximum amount of shares were to vest based on the achievement of the performance condition was $ 30,864 , and the weighted-average remaining vesting period of non-vested PSUs was one year as of December 31, 2020.

Stockholder’s equity and Members’ equity

New Fortress Energy Holdings

In January 2018, New Fortress Energy Holdings, the Company’s predecessor, issued 665,843 common shares (no par value) to members of New Fortress Energy Holdings for $20,150 in

New Fortress Energy LLC

During the year ended December 31, 2019, the Company issued 2,716,252 shares of Class A shares in exchange for Class B shares, and 53,572 Class A shares were issued for vested

As of December 31, 2019, NFE has 23,607,096 Class A Shares outstanding, and New Fortress Energy Holding has an 85.9% economic interest in NFI through ownership of 144,342,572

NFI LLC units and New Fortress Energy Holdings holds an 85.9% voting interest in NFE.

Leases, as lessee

During the years ended December 31, 2019, 2018, and 2017, the Company recognized rental expense for all operating leases of $37,069, $23,687, and $17,369, respectively.

operating leases were related primarily to LNG vessel time charters, office space, land leases, and marine port berth leases as summarized in the table below.

Non-cancellable Initial Term

Renewal Option

Rent Escalation (per annum)

LNG vessel time charter

Marine port berth

20 to 25 years

0 to 20 years

Office space and land

monthly to 7 years

One marine port berth lease has a 15% lease payment escalation after year five

Future minimum lease payments under non-cancellable operating leases are as follows:

Year ending December 31:

In January 2018 , the Company issued 665,843 common shares ( no par value) to members of New Fortress Energy Holdings for $ 20,150 in proceeds.

New Fortress Energy LLC, New Fortress Energy Inc.

During the year ended December 31, 2019, the Company issued 2,716,252 shares of Class A shares in exchange for Class B shares, and 53,572 Class A shares were issued for vested RSUs.

As a result of the Exchange Transactions, 144,342,572 Class A shares were issued in exchange for all outstanding Class B shares.

As a result of the Conversion, all outstanding Class A shares were converted to Class A common stock.

In December 2020 , NFE issued 5,882,352 shares of Class A common stock and received proceeds of $ 290,771 , net of $ 1,221 in issuance costs.

The Company declared dividends of $ 0.10 per share in August and October 2020 , totaling $ 33,742 in dividend payments during the year ended December 31, 2020.

Related party transactions

Management services

The Company is majority-owned by a private equity fund managed by an affiliate of Fortress Investment Group LLC (“Fortress”).

In the ordinary course of business, Fortress through affiliated

entities, has historically charged the Company for administrative and general expenses incurred pursuant to its Management Services Agreement (“Management Agreement”).

Upon completion of the IPO, the Management Agreement was terminated and

replaced by an Administrative Services Agreement (“Administrative Agreement”) to charge the Company for similar administrative and general expenses.

The charges under the Management Agreement and Administrative Agreement that are attributable

to the Company totaled $7,942, $5,741 and $3,866 for years ended December 31, 2019, 2018, and 2017, respectively.

Costs associated with the Management Agreement and Administrative Agreement are included within Selling, general and

administrative in the consolidated statements of operations and comprehensive loss.

The Company is majority owned by Messrs.

Edens (our chief executive officer and chairman of our Board of Directors) and Nardone ( one of our Directors) who are currently employed by Fortress Investment Group LLC (“Fortress”).

In the ordinary course of business, Fortress, through affiliated entities, has historically charged the Company for administrative and general expenses incurred pursuant to its Management Services Agreement (“Management Agreement”).

Upon completion of the IPO, the Management Agreement was terminated and replaced by an Administrative Services Agreement (“Administrative Agreement”) to charge the Company for similar administrative and general expenses.

The charges under the Management Agreement and Administrative Agreement that are attributable to the Company totaled $ 7,291 , $ 7,942 and $ 5,741 for the years ended December 31, 2020, 2019 and 2018 , respectively.

Costs associated with the Management Agreement and Administrative Agreement are included within Selling, general and administrative in the consolidated statements of operations and comprehensive loss.

As of December 31, 2020 and 2019, $ 5,535 and $ 5,083 were due to Fortress, respectively.

In addition to management and administrative services, an affiliate of Fortress owns and leases an aircraft chartered by the Company for business purposes in the course of operations.

incurred, at aircraft operator market rates, charter costs of $5,367 for the year ended December 31, 2019, and $4,286 is due to this affiliate as of December 31, 2019.

In prior years, such charges were incurred under the Management Agreement

and amounts incurred of $1,873 and $2,917 for the years ended December 2018 and 2017, respectively, are included in the activity and balances disclosed above.

The Company incurred, at aircraft operator market rates, charter costs of $ 2,483 and $ 5,367 for the years ended December 31, 2020 and 2019 , respectively.

In 2018 , such charges were incurred under the Management Agreement, and amounts incurred of $ 1,873 for the year ended December 31, 2018 are included in the activity and balances disclosed above.

As of December 31, 2020 and 2019 , $ 472 and $ 4,286 was due to this affiliate, respectively.

Land and office lease

The Company has leased land and office space from Florida East Coast Industries, LLC (“FECI”), an affiliate of the Company.

In April 2019, FECI sold the office building to a non-affiliate, and as

such, the lease of the office space is no longer held with a related party.

The expense related to the office building for the period that the building was owned by a related party during the year ended December 31, 2019 totaled $609, of which

$386 was capitalized as leasehold improvements and $223 was included in Selling, general and administrative in the consolidated statements of operations and comprehensive loss;

The Company has leased land and office space from Florida East Coast Industries, LLC (“FECI”), which is controlled by funds managed by an affiliate of Fortress.

In April 2019 , FECI sold the office building to a non-affiliate, and as such, the lease of the office space is no longer held with a related party.

The Company recognized expense related to the land lease still held by a related party of $ 730 , $ 396 and $ 260 during the years ended December 31, 2020, 2019 and 2018 , respectively, which was included within Operations and maintenance in the consolidated statements of operations and comprehensive loss.

The expense for the period that the building was owned by a related party during the year ended December 31, 2019 totaled $ 609 , of which $ 386 was capitalized to Construction in progress and $ 223 was included in Selling, general and administrative in the consolidated statements of operations and comprehensive loss;

no expense for the office space was incurred prior to 2019 .

expense for the land lease during the years ended December 31, 2019, 2018, and 2017 was $396, $260, and $285, respectively, and these amounts have been recognized within Operations and maintenance in the consolidated statements of operations

and comprehensive loss.

As of December 31, 2019 and 2018, $0 and $597 were due to FECI, respectively.

As of December 31, 2020 and 2019, $ 316 and $ 0 was due to FECI, respectively.

As of December 31, 2020 , the Company has recorded a lease liability of $ 3,279 within Non-current lease liabilities on the consolidated balance sheet.

DevTech Investment

In August 2018, the Company entered into a consulting arrangement with DevTech Environment Limited (“DevTech”), to provide business development services to increase the customer base of the

In August 2018, the Company entered into a consulting arrangement with DevTech Environment Limited (“DevTech”) to provide business development services to increase the customer base of the Company.

DevTech also contributed cash consideration in exchange for a 10 % interest in a consolidated subsidiary.

The 10 % interest is reflected as non-controlling interest in the Company’s consolidated financial statements.

DevTech purchased

10% of a note payable due to an affiliate of the Company.

DevTech purchased 10 % of a note payable due to an affiliate of the Company.

As of December 31, 2020 and 2019, $ 715 and $ 815 was owed to DevTech on the note payable, respectively.

The outstanding note payable due to DevTech is included in Other long-term

liabilities on the consolidated balance sheets as of December 31, 2019.

For the years ended December 31, 2019 and 2018, interest expense on the note payable due to DevTech was $94 and $18, respectively;

no interest has been paid, and accrued

interest has been recognized within Other current liabilities on the consolidated balance sheets.

The outstanding note payable due to DevTech is included in Other long-term liabilities on the consolidated balance sheets.

The interest expense on the note payable due to DevTech was $ 77 , $ 94 and $ 18 for the years ended December 31, 2020, 2019 and 2018 respectively.

No interest has been paid, and accrued interest has been recognized within Accrued expenses on the consolidated balance sheets.

As of December 31, 2020 and 2019, $ 343 and $ 443 was due from DevTech, respectively.

Fortress affiliated entities

Since 2017, the Company has provided certain administrative services to related parties including Fortress Equity Partners.

As of December 31, 2019 and 2018, $1,134 and $525 were due from

affiliates, respectively.

Since 2017 , the Company has provided certain administrative services to related parties including Fortress affiliated entities.

As of December 31, 2020 and 2019, $ 1,334 and $ 1,134 were due from affiliates, respectively.

There are no costs incurred by the Company as the Company is fully reimbursed for all costs incurred.

Additionally, Fortress affiliated entities provide certain administrative services to the Company.

As of December

31, 2019 and 2018, $883 and $305 were due to Fortress affiliates, respectively.

Additionally, an entity formerly affiliated with Fortress and currently owned by Messrs.

Edens and Nardone provides certain administrative services to the Company, as well as providing office space under a month-to-month non-exclusive license agreement.

The Company incurred rent and administrative expenses of approximately $ 2,357 , $ 811 and $ 903 for the years ended December 31, 2020, 2019 and 2018 , respectively.

Additionally, the Company subleases a portion of office space to an affiliate of an entity managed by Fortress, and for the year ended December 31, 2020 , $ 204 of rent and office related expenses were incurred by this affiliate.

As of December 31, 2020 and 2019, $ 2,657 and $ 883 were due to Fortress affiliated entities, respectively.

Due to/from Affiliates

The table below summarizes the balances outstanding with affiliates at December 31, 2019 and 2018:

The table below summarizes the balances outstanding with affiliates as of December 31, 2020 and 2019:

Amounts due to affiliates

1 unchanged sentence

Customer concentrations

For the year ended December 31, 2019, revenue from two significant customers constituted 74% of the total revenue and 85% of trade receivables.

For the year ended 2018 and 2017, revenue from one

significant customer constituted 87% and 92% of total revenue, respectively, and as of December 31, 2018, this customer comprised 93% of trade receivables.

In addition to trade receivables, the Company has primarily leased facilities under

direct financing leases to this customer.

As of December 31, 2019 and 2018, 99% and 98% of the Finance leases, net balance was attributed to this significant customer, respectively.

During the years ended December 31, 2019, 2018, and 2017, revenue from external customers that were derived from customers located in the United States were $21,386, $7,214 and $4,935,

respectively, and from customers outside of the United States were $167,739, $105,087 and $92,327, respectively, primarily derived from customers in the Caribbean.

The Company attributes revenue from external customers to the country in which

the party to the applicable agreement has its principal place of business.

As of December 31, 2019 and 2018, long lived assets, which are all non-current assets excluding investment in equity securities, restricted cash, deferred tax assets and intangible assets, located

in the United States were $360,860 and $151,729, respectively, and long lived assets located outside of the United States were $470,749 and $325,416, respectively, primarily located in the Caribbean.

For the year ended December 31, 2020, revenue from three significant customers constituted 88 % of the total revenue and 83 % of trade receivables.

For the year ended December 31, 2019, revenue from two significant customers constituted 74 % of the total revenue and 85 % of trade receivables, and for the year ended December 31, 2018, one significant customer constituted 87 % of total revenue.

Prior to the adoption of ASC 842, the Company recognized a direct financing leases within the Company’s agreement with this customer.

As of December 31, 2019, 99 % of the Finance leases, net balance was attributed to this significant customer.

During the years ended December 31, 2020, 2019 and 2018, revenue from external customers that were derived from customers located in the United States were $ 135,702 , $ 21,386 and $ 7,214 , respectively, and from customers outside of the United States were $ 315,948 , $ 167,739 and $ 105,087 , respectively, primarily derived from customers in the Caribbean.

The Company attributes revenue from external customers to the country in which the party to the applicable agreement has its principal place of business.

As of December 31, 2020 and 2019, long lived assets, which are all non-current assets excluding investment in equity securities, restricted cash, deferred tax assets and intangible assets, located in the United States were $ 442,199 and $ 360,860 respectively, and long lived assets located outside of the United States were $ 639,370 and $ 470,749 , respectively, primarily located in the Caribbean.

Unaudited quarterly financial data

Due to the change in organization structure as a result of reorganization transactions completed at the time of the IPO in 2019, the 2018 quarterly net loss per share is not

presented as it is not comparable to 2019.

Summarized quarterly financial data for the years ended December 31, 2020 and 2019 are as follows:

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Operating loss

Net loss attributable to stockholders

Basic and diluted loss per share (1)

(1) Basic and diluted earnings per share are computed independently for each of the quarters presented.

Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted

earnings per share.

Net (loss) income attributable to stockholders

Basic and diluted (loss) income per share (3)

Three Months Ended

2 unchanged sentences

Net loss attributable to stockholders

Basic and diluted loss per share (3)

Operating loss, net loss and net loss attributable to stockholders for the three months ended March 31, 2020 and June 30, 2020 reflect the adoption of ASC 326 .

The Company adopted ASC 326 in the third quarter of 2020 with an effective date of January 1, 2020 , due to the loss of EGC status in that quarter.

Operating loss, net loss and net loss attributable to stockholders for the three months ended June 30, 2020 includes a termination charge of $ 105,000 associated with an agreement with one of the Company’s LNG suppliers to terminate the obligation to purchase any LNG from this supplier for the remainder of 2020.

Basic and diluted earnings per share are computed independently for each of the quarters presented.

Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share.

Subsequent events

The Credit Agreement

On January 10, 2020, the Company entered into a credit agreement to borrow $800,000 in term loans (the “Credit Agreement”).

The Credit Agreement will mature in January 2023

with the full principal balance due upon maturity.

Interest is payable quarterly and is based on a LIBOR rate divided by one minus the applicable reserve requirement, subject to a floor of 1.50%, plus a margin of 6.25%.

The interest rate margin

increases each year of the term by 1.50%.

Proceeds received were net of upfront and structuring fees, and together with other fees and expenses paid in connection with obtaining this financing, these fees will be

recorded as a reduction to the principal balance on the consolidated balance sheet.

Proceeds received were utilized to extinguish the Term Loan Facility, including outstanding principal of $495,000.

LNG Supply Agreement

On February 7, 2020, the Company entered into a long-term supply agreement for the purchase of 27.5 TBtus per year of LNG at a price indexed to Henry Hub.

The term of the purchase commitment is

January 2022 through January 2030.

Schedule I – Condensed Financial Information of Registrant

New Fortress Energy LLC

(Parent Company Only)

Condensed Balance Sheets

As of December 31, 2019 and 2018

(in thousands of U.S.

Dollars, except share amounts)

Current assets

Cash and cash equivalents

Total current assets

Investment in subsidiaries

Stockholders’ equity

Members’ capital, no par value, 500,000,000 shares authorized, 67,983,095 shares issued and outstanding as of December 31, 2018

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

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

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to condensed financial statements

Schedule I – Condensed Financial Information of Registrant

New Fortress Energy LLC

(Parent Company Only)

Condensed Statements of Operations and Comprehensive Loss

For the years ended December 31, 2019, 2018 and 2017

(in thousands of U.S.

Year Ended December 31,

Selling, general and administrative

Operating loss

Other income, net

Income (loss) before taxes and equity in net loss of subsidiaries

Tax expense (benefit)

Equity in net loss of subsidiaries

Other comprehensive (loss) income

Comprehensive loss

See accompanying notes to condensed financial statements

Schedule I – Condensed Financial Information of Registrant

New Fortress Energy LLC

(Parent Company Only)

Condensed Statements of Cash Flows

For the years ended December 31, 2019, 2018 and 2017

(in thousands of U.S.

Year Ended December 31,

Cash flows from operating activities

Adjustments for:

Equity in net losses of subsidiaries

Net cash provided by/(used in) operating activities

Cash flows from investing activities

Investment in subsidiaries

Net cash used in investing activities

Cash flows from financing activities

Proceeds from IPO

Repayment of affiliate note

Capital contributed from Members

Collection of subscription receivable

Net cash provided by financing activities

Net (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash - beginning of period

Cash and cash equivalents and restricted cash - end of period

See accompanying notes to condensed financial statements

Schedule I – Condensed Financial Information of Registrant

New Fortress Energy LLC

(Parent Company Only)

Notes to Condensed Financial Statements

Organization and presentation

New Fortress Energy LLC (“NFE”) was formed as a Delaware limited liability company by New Fortress Energy Holdings on August 6, 2018.

On February 4, 2019, NFE completed an initial public offering

(“IPO”) in which NFE issued and sold 20,000,000 Class A shares at an IPO price of $14.00 per share.

In addition, on March 1, 2019, the underwriters exercised their option to purchase an additional 837,272 Class A shares.

NFE raised net

proceeds of $274.9 million, after deducting underwriting discounts and commissions.

These proceeds were contributed in exchange for limited liability company units (“NFI LLC Units”) in New Fortress Intermediate LLC (“NFI”), an entity formed

in conjunction with the IPO, at a price per unit equal to the IPO price.

In addition, New Fortress Energy Holdings contributed all of its interests in consolidated subsidiaries that comprised substantially all of its historic operations, as

well its limited assets and liabilities, to NFI in exchange for NFI LLC Units.

New Fortress Energy Holdings has been determined to be NFE’s predecessor for accounting purposes.

NFE’s consolidated subsidiaries have outstanding borrowings under a term loan agreement and under secured and unsecured bonds, and there are restrictions in the credit agreements governing these

borrowings, described in Note 17 of the Notes to the consolidated financial statements, on NFE’s ability to obtain funds from any of its subsidiaries through dividends, loans, or advances.

As of December 31, 2019, substantially all of the

net assets of NFE’s consolidated subsidiaries were restricted.

Accordingly, this condensed financial information is presented on a “Parent-only” basis.

Under a Parent-only presentation, NFE’s investments in its consolidated subsidiaries are

presented under the equity method of accounting.

The condensed financial statements of NFE reflect the results of operations of NFE commencing on the date of IPO.

For the periods prior to the IPO, the condensed financial statements of New

Fortress Energy Holdings are presented.

NFE is a holding company that does not conduct any business operations of its own, and therefore its assets primarily consist of investment in subsidiaries.

The condensed financial information of NFE should be read in conjunction with the consolidated financial statement of NFE and the accompanying notes thereto.

As of December 31, 2019 and 2018, NFE had no debt on its balance sheet.

However, certain of its subsidiaries are subject to debt agreements.

agreements require the subsidiaries to comply with certain financial covenants and other restricted covenants customary for facilities of this type, including restrictions on indebtedness, lines, acquisitions, investments, restricted payments,

and dispositions.

For a discussion of the nature and terms of those agreements, refer to Note 17 to NFE’s consolidated financial statements.

Hygo Merger Agreement

On January 13, 2021, NFE, Hygo Energy Transition Ltd., a Bermuda exempted company (“Hygo”), Golar LNG Limited, a Bermuda exempted company (“GLNG”), Stonepeak Infrastructure Fund II Cayman (G) Ltd.

(“Stonepeak”), and Lobos Acquisition Ltd., a Bermuda exempted company and an indirect, wholly-owned subsidiary of NFE (“Hygo Merger Sub”), entered into an Agreement and Plan of Merger (the “Hygo Merger Agreement”), pursuant to which Hygo Merger Sub will merge with and into Hygo (the “Hygo Merger”), with Hygo surviving the Hygo Merger as a wholly owned subsidiary of NFE.

As of the date of the Hygo Merger Agreement, each of GLNG and Stonepeak owned 50 % of the outstanding common shares, par value $ 1.00 per share, of Hygo, and Stonepeak owned all of Hygo’s outstanding redeemable preferred shares, par value $ 5.00 per share.

At the effective time of the Hygo Merger:

(i) GLNG will receive 18.6 million shares of NFE Class A common stock and an aggregate of $ 50 million in cash and (ii) Stonepeak will receive 12.7 million shares of NFE Class A common stock and an aggregate of $ 530 million in cash.

The Hygo Merger Agreement may be terminated by NFE or Hygo under certain circumstances, including, among others, by either NFE or Hygo if the closing of the Hygo Merger has not occurred on or before July 12, 2021.

GMLP Merger Agreement

On January 13, 2021, NFE entered into an Agreement and Plan of Merger (the “GMLP Merger Agreement”) with Golar LNG Partners LP, a Marshall Islands limited partnership (“GMLP”), Golar GP LLC, a Marshall Islands limited liability company and the general partner of GMLP (the “General Partner”), Lobos Acquisition LLC, a Marshall Islands limited liability company and an indirect subsidiary of NFE (“GMLP Merger Sub”), and NFE International Holdings Limited, a private limited company incorporated under the laws of England and Wales and an indirect subsidiary of NFE (“GP Buyer”), pursuant to which GMLP Merger Sub will merge with and into GMLP, with GMLP surviving the merger as an indirect subsidiary of NFE (the “GMLP Merger”).

At the effective time of the GMLP Merger (the “GMLP Effective Time”), each common unit representing a limited partner interest in GMLP that is issued and outstanding as of immediately prior to the GMLP Effective Time will automatically be converted into the right to receive $ 3.55 in cash.

At the GMLP Effective Time, each of the incentive distribution rights of GMLP will be canceled and cease to exist, and no consideration shall be delivered in respect thereof.

Each 8.75 % Series A Cumulative Redeemable Preferred Unit of GMLP issued and outstanding immediately prior to the GMLP Effective Time will be unaffected by the GMLP Merger and will remain outstanding, and no consideration shall be delivered in respect thereof.

Each outstanding unit representing a general partner interest of GMLP that is issued and outstanding immediately prior to the GMLP Effective Time will remain issued and outstanding immediately following the GMLP Effective Time.

Concurrently with the consummation of the GMLP Merger, GP Buyer will purchase from GLNG all of the outstanding membership interests of the General Partner pursuant to a Transfer Agreement dated as of January 13, 2021 for a purchase price of approximately $ 5 million, which is equivalent to $ 3.55 per general partner unit of GMLP.

The GMLP Merger Agreement may be terminated by NFE or GMLP (which, in the case of GMLP, must be approved by GMLP ’ s Conflicts Committee) under certain circumstances, including, among others, by either NFE or GMLP if the closing of the GMLP Merger has not occurred on or before July 13, 2021, and further provides that, upon termination of the GMLP Merger Agreement under certain circumstances, GMLP may be required to pay NFE a termination fee equal to approximately $ 9.4 million.

We have obtained debt financing commitments from Morgan Stanley Senior Funding, Inc.

and Goldman Sachs Bank USA for loans in an aggregate principal amount of $ 1.7 billion, consisting of a $ 1.5 billion senior secured bridge facility (the “Bridge Loan”) and a $ 200 million senior secured revolving facility to pay, subject to the terms and conditions set forth therein, a portion of the cash purchase price in connection with the GMLP Merger, to refinance certain debt of GMLP and its subsidiaries, to pay related fees and expenses and for general corporate purposes.

If NFE utilizes the Bridge Loan, the facility will bear a fixed interest rate of 6.25 %, subject to a step-up of 50 basis points every three months.

The Bridge Loan has a one-year term, is pre-payable without penalty and will automatically be converted into a seven-year term loan if it is not repaid in full at maturity.

The senior secured revolving facility has a term of approximately five years and bears interest based on the three-month LIBOR rate plus certain margins.

Suape Development

On January 12, 2021, we acquired CH4 Energia Ltda., an entity that owns key permits and authorizations to develop an LNG terminal at the Port of Suape, Brazil.

On March 11, 2021, we acquired 100 % of the outstanding shares of Pecem Energia S.A.

(“Pecem”) and Energetica Camacari Muricy II S.A.

These companies collectively hold certain 15 -year power purchase agreements for the development of thermoelectric power plants in the State of Bahia, Brazil.

We will seek to obtain the necessary approvals to transfer the power purchase agreements to the Port of Suape and plan to construct a gas-fired power plant and LNG import terminal at the Port of Suape.

The Company paid approximately $ 9 million at closing in total and will make additional payments to the sellers based on certain contingent considerations.

Beginning of Year

3 unchanged sentences

Allowance for doubtful accounts

Allowance for expected credit losses

Total allowance

Year ended December 31, 2019

2 unchanged sentences

Allowance for doubtful accounts

Amount expensed is included within Selling, general and administrative

Amount expensed in included within Selling, general and administrative.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures