New Fortress Energy Inc. 10-K

Item 9A. Controls and Procedures. 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, 2021. 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, 2021 at the reasonable assurance level. Changes in Internal Control over Financial Reporting There has been no change 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 the quarter ended December 31, 2021 that has materially affected, or is 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. 78 Table of Contents As previously noted in this Form 10-K, we completed the acquisition of Hygo and GMLP on April 15, 2021. As permitted by related SEC staff interpretative guidance for newly acquired businesses, Hygo and GMLP have been excluded from management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, except for the recognition of goodwill and intangible assets that were included in management’s assessment. Hygo and GMLP are included in the 2021 consolidated financial statements of the Company and constituted approximately 31% and 22% of the Company’s total assets, respectively, as of December 31, 2021 after excluding goodwill and intangible assets and approximately 5% and 14% of the Company’s revenues, respectively, for the year then ended. See Part II, Item 8, Note 4, “Notes to Consolidated Financial Statements”, contained in this Form 10-K for further description of the significance of the acquired businesses to us. As of December 31, 2021, 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, 2021. The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by EY, an independent registered public accounting firm, as stated in their report, which appears herein. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 79 Table of Contents Part III Item 10. 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, 2021 in connection with our 2022 annual meeting of shareholders and is incorporated herein by reference. Item 11. 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, 2021 in connection with our 2022 annual meeting of shareholders and is incorporated herein by reference. Item 12. 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, 2021 in connection with our 2022 annual meeting of shareholders and is incorporated herein by reference. Item 13. 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, 2021 in connection with our 2022 annual meeting of shareholders and is incorporated herein by reference. Item 14. 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, 2021 in connection with our 2022 annual meeting of shareholders and is incorporated herein by reference. 80 Table of Contents Part IV Item 15. Exhibits, Financial Statement Schedules. The financial statements of New Fortress Energy Inc. and consolidated subsidiaries are included in Item 8 of this Form 10-K (Form 10-K). Refer to “Index to Financial Statements” set forth of page F-1. The report of New Fortress Energy’s independent registered public accounting firm (PCAOB ID: 42 ) with respect to the above-referenced financial statements and their report on internal control over financial reporting are included in Item 8 and Item 9A of this Form 10-K at the page numbers F-2 and F-4, respectively. Their consent appears as Exhibit 23.1 of this Form 10-K. (2) Financial Statement Schedules. See Schedule II set forth on page F-56. (b) Exhibits. The exhibits required to be filed by this Item 15(b) are set forth in the Exhibit Index included below. Exhibit Number Description 2.1 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 SEC on January 20, 2021). 2.2 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 SEC on January 20, 2021). 2.3 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 SEC on January 20, 2021). 3.1 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 SEC on November 9, 2018). 3.2 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 SEC on November 9, 2018). 3.3 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 SEC on February 5, 2019). 3.4 Certificate of Conversion of New Fortress Energy Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed with the SEC on August 7, 2020). 3.5 Certificate of Incorporation of New Fortress Energy Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K filed with the SEC on August 7, 2020). 3.6 Bylaws of New Fortress Energy Inc. (incorporated by reference to Exhibit 3.3 to the Registrant’s Form 8-K filed with the SEC on August 7, 2020). 4.1* Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. 81 Table of Contents 10.1 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 SEC on February 5, 2019). 10.2 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 SEC on February 5, 2019). 10.3† 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 SEC on February 4, 2019). 10.4† 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 SEC on December 24, 2018). 10.5† Form of Employee Restricted Share Unit Award Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001- 38790), filed with the Commission on May 15, 2019). 10.6 Shareholders’ Agreement, dated February 4, 2019, by and among New Fortress Energy LLC, New Fortress Energy Holdings LLC, Wesley R. Edens and Randal A. Nardone (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.7 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 SEC on February 5, 2019). 10.8† Indemnification Agreement (Edens) (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.9† Indemnification Agreement (Guinta) (incorporated by reference to Exhibit 10.5 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.10† Indemnification Agreement (Catterall) (incorporated by reference to Exhibit 10.7 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.11† Indemnification Agreement (Grain) (incorporated by reference to Exhibit 10.8 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.12† Indemnification Agreement (Griffin) (incorporated by reference to Exhibit 10.9 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.13† Indemnification Agreement (Mack) (incorporated by reference to Exhibit 10.10 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.14† Indemnification Agreement (Nardone) (incorporated by reference to Exhibit 10.11 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.15† Indemnification Agreement (Wanner) (incorporated by reference to Exhibit 10.12 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.16† Indemnification Agreement (Wilkinson) (incorporated by reference to Exhibit 10.13 to the Registrant’s Form 8-K (File No. 001-38790), filed with the SEC on February 5, 2019). 10.17 Amendment Agreement dated as 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 Annual Report on Form 10-K, filed with the SEC on March 26, 2019). 82 Table of Contents 10.18 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 Annual Report on Form 10-K, filed with the SEC on March 26, 2019). 10.19 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 SEC on January 25, 2019). 10.20† 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, filed with the SEC on March 26, 2019). 10.21 Letter Agreement, dated as of December 3, 2019, by and between NFE Management LLC and Yunyoung Shin. (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 6, 2020). 10.22 Indenture, dated September 2, 2020, by and among the Company, 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, filed with the SEC on September 2, 2020). 10.23 Pledge and Security Agreement, dated September 2, 2020, by and among the Company, the subsidiary guarantors from time to time party thereto, and U.S. Bank National Association, as notes collateral agent (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 2, 2020). 10.24 First Supplemental Indenture, dated December 17, 2020, by and among the Company, 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, filed with the SEC on December 18, 2020). 10.25 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 SEC on January 20, 2021). 10.26 Indenture, dated April 12, 2021, by and among the Company, 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, filed with the SEC on April 12, 2021). 10.27 Pledge and Security Agreement, dated April 12, 2021, by and among the Company, the subsidiary guarantors, from time to time party thereto, and U.S. Bank National Association, as notes collateral agent (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 12, 2021). 10.28 Shareholders’ Agreement, dated as of April 15, 2021, by and among the Company, GLNG, and Stonepeak (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 21, 2021). 10.29 Credit Agreement, dated as of April 15, 2021, by and among the Company, as the borrower, the guarantors from time to time party thereto, the several lenders and issuing banks from time to time party thereto, and Morgan Stanley Senior Funding, Inc,. as administrative agent and collateral agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on April 21, 2021). 10.30* First amendment to Credit Agreement, dated as of July 16, 2021 to the Credit Agreement, dated as of April 15, 2021, by and among the Company, as the borrower, the guarantors from time to time partly thereto, the several lenders and issuing banks from time to time partly thereto, and Morgan Stanley Senior Funding, Inc., as administrative agent. 10.31* Second Amendment to Credit Agreement, dated as of February 28, 2022 to the Credit Agreement, dated as of April 15, 2021, by and among the Company, as the borrower, the guarantors from time to time party thereto, the several lenders and issuing banks from time to time party thereto, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent. 83 Table of Contents 10.32 Omnibus Agreement, dated as of April 15, 2021, by and among the Company, GLNG and certain other parties thereto (incorporated by reference to Exhibit 10.30 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 7, 2021). 10.33 Indemnity Agreement, dated as of April 15, 2021, by and among the Company, GLNG, and certain affiliates of Stonepeak (incorporated by reference to Exhibit 10.31 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 7, 2021). 10.34 Omnibus Agreement, dated as of April 15, 2021, by and among the Company, GMLP, GLNG and certain parties thereto (incorporated by reference to Exhibit 10.32 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 7, 2021). 10.35 Indemnification Agreement, dated as of April 15, 2021, by and between NFE International and GLNG (incorporated by reference to Exhibit 10.33 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 7, 2021). 10.36 Facility Agreement, dated September 18, 2021, by and among Golar Partners Operating LLC as the Borrower, Golar LNG Partners LP and certain subsidiaries of the Borrower, with (i) Citibank N.A. and the lenders from time to time party thereto; (ii) Citigroup Global Markets Limited, Morgan Stanley Senior Funding, Inc. and HSBC Bank USA, N.A. as mandated lead arrangers; (iii) Goldman Sachs Bank USA as arranger; (iv) Citigroup Global Markets Limited and Morgan Stanley Senior Funding, Inc. as bookrunners; (v) Citigroup Global Markets Limited and Morgan Stanley Senior Funding, Inc. as co-ordinators, (vi) Citibank Europe Plc, UK Branch as agent and (vii) Citibank, N.A., London Branch as security agent. (incorporated by reference to Exhibit 10.34 to the Registrant is quarterly report on Form 10-Q, filed with the SEC on November 3, 2021). 23.1* Consent of Ernst & Young LLP, independent registered public accounting firm. 31.1* Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certifications by Chief Executive Officer pursuant to Title 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002. 32.2** Certifications by Chief Financial Officer pursuant to Title 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002. 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Schema Document 101.CAL* Inline XBRL Calculation Linkbase Document 101.LAB* Inline XBRL Label Linkbase Document 101.PRE* Inline XBRL Presentation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 104* Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101 * Filed as an exhibit to this Annual Report ** Furnished as an exhibit to this Annual Report † Compensatory plan or arrangement 84 Table of Contents Item 16. Form 10-K Summary. None. 85 Table of Contents SIGNATURES 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. Date: March 1, 2022 By: /s/ Christopher Guinta Name: Christopher S. Guinta Title: 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 indicated. Name Title Date /s/ Wesley R. Edens Chief Executive Officer and Chairman (Principal Executive Officer) March 1, 2022 Wesley R. Edens /s/ Christopher S. Guinta Chief Financial Officer (Principal Financial Officer) March 1, 2022 Christopher S. Guinta /s/ Yunyoung Shin Chief Accounting Officer (Principal Accounting Officer) March 1, 2022 Yunyoung Shin /s/ Randal A. Nardone Director March 1, 2022 Randal A. Nardone /s/ C. William Griffin Director March 1, 2022 C. William Griffin /s/ John J. Mack Director March 1, 2022 John J. Mack /s/ Matthew Wilkinson Director March 1, 2022 Matthew Wilkinson /s/ David J. Grain Director March 1, 2022 David J. Grain /s/ Desmond Iain Catterall Director March 1, 2022 Desmond Iain Catterall /s/ Katherine E. Wanner Director March 1, 2022 Katherine E. Wanner 86 Table of Contents Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets F-5 Consolidated Statements of Operations and Comprehensive Income (Loss) F-6 Consolidated Statements of Changes in Stockholders’ Equity F-7 Consolidated Statements of Cash Flows F-8 Notes to Consolidated Financial Statements F-9 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders 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 Inc. (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, 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, 2021, 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 1, 2022 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. 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 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. 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. 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. Fair value measurements in connection with GMLP and Hygo business combinations Description of the Matter As discussed in Note 4 to the consolidated financial statements, on April 15, 2021, the Company completed the acquisitions of Hygo Energy Transition Ltd. (“Hygo”) and Golar LNG Partners LP (“GMLP”) (collectively, the “Acquisitions”) for total consideration of $1.98 billion and $1.15 billion, respectively. The Acquisitions were accounted for as separate business combinations. The Company’s accounting under the acquisition method included determining the fair value of the acquired assets, liabilities assumed and noncontrolling interests in the acquired entities. Auditing the Company’s accounting for the Acquisitions was complex due to the significant estimation uncertainty inherent in determining the fair value of the acquired assets, liabilities assumed and noncontrolling interests in the acquired entities. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to changes in the underlying assumptions. The significant assumptions used to estimate the fair value of these assets, liabilities and noncontrolling interests included: (i.) discount rates applied to the contractual cash flows associated with the acquired equity method investments, contract intangible assets, assumed debt and noncontrolling interests in the acquired entities, (ii.) the estimated replacement cost of the acquired vessels, and (iii.) market day rates used to measure the fair value of vessel charter contracts. F-2 Table of Contents How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s business combinations process. This included controls over the valuation of acquired assets, liabilities assumed and noncontrolling interests in the acquired entities and management’s review of the significant assumptions described above. To test the estimated fair value of the acquired assets, liabilities assumed and noncontrolling interests in the acquired entities, we performed audit procedures that included, among others, evaluating the valuation methodologies utilized by management and the significant assumptions described above, as well as testing the completeness and accuracy of the underlying data. For example, we compared the significant assumptions utilized to current market and economic trends and to the historical results of the acquired businesses. We also performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the acquired vessels, contract intangible assets, and equity method investments that would result from changes in the assumptions. We involved our internal valuation specialists to assist in evaluating the valuation methodologies used and the significant assumptions described above, including the discount rates utilized and the replacement costs of the acquired vessels. Impairment Assessment of Long-Lived Assets Description of the Matter As described in Note 2(j) 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 in Our Audit 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 We have served as the Company’s auditor since 2016. Philadelphia, Pennsylvania March 1, 2022 F-3 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockolders 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, 2021, 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, 2021, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Hygo Energy Transition Ltd (“Hygo”) and Golar LNG Partners LP (“GMLP”), except for the recognition of goodwill and intangible assets that were included in management’s assessment. Hygo and GMLP are included in the 2021 consolidated financial statements of the Company and constituted approximately 31% and 22% of the Company’s total assets, respectively, as of December 31, 2021 after excluding goodwill and intangible assets and approximately 5% and 14% of the Company’s revenues, respectively, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Hygo and GMLP, except for the recognition of goodwill and intangible assets. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2021 consolidated financial statements of the Company and our report dated March 1, 2022 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. 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 the policies or procedures may deteriorate. /s/ Ernst & Young LLP Philadelphia, Pennsylvania March 1, 2022 F-4 Table of Contents PART I FINANCIAL INFORMATION Item 8. Financial Statements New Fortress Energy Inc. Consolidated Balance Sheets As of December 31, 2021 and 2020 (in thousands of U.S. dollars, except share and per share amounts) December 31, 2021 December 31, 2020 Assets Current assets Cash and cash equivalents $ 187,509 $ 601,522 Restricted cash 68,561 12,814 Receivables, net of allowances of $ 164 and $ 98 , respectively 208,499 76,544 Inventory 37,182 22,860 Prepaid expenses and other current assets, net 83,115 48,270 Total current assets 584,866 762,010 Restricted cash 7,960 15,000 Construction in progress 1,043,883 234,037 Property, plant and equipment, net 2,137,936 614,206 Equity method investments 1,182,013 - Right-of-use assets 309,663 141,347 Intangible assets, net 142,944 46,102 Finance leases, net 602,675 7,044 Goodwill 760,135 - Deferred tax assets, net 5,999 2,315 Other non-current assets, net 98,418 86,030 Total assets $ 6,876,492 $ 1,908,091 Liabilities Current liabilities Current portion of long-term debt $ 97,251 $ - Accounts payable 68,085 21,331 Accrued liabilities 244,025 90,352 Current lease liabilities 47,114 35,481 Other current liabilities 106,036 43,986 Total current liabilities 562,511 191,150 Long-term debt 3,757,879 1,239,561 Non-current lease liabilities 234,060 84,323 Deferred tax liabilities, net 269,513 2,330 Other long-term liabilities 58,475 15,641 Total liabilities 4,882,438 1,533,005 Commitments and contingencies (Note 21) Stockholders’ equity Class A common stock, $ 0.01 par value, 750.0 million shares authorized, 206.9 million issued and outstanding as of December 31, 2021; 174.6 million issued and outstanding as of December 31, 2020 2,069 1,746 Additional paid-in capital 1,923,990 594,534 Accumulated deficit ( 132,399 ) ( 229,503 ) Accumulated other comprehensive (loss) income ( 2,085 ) 182 Total stockholders’ equity attributable to NFE 1,791,575 366,959 Non-controlling interest 202,479 8,127 Total stockholders’ equity 1,994,054 375,086 Total liabilities and stockholders’ equity $ 6,876,492 $ 1,908,091 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents New Fortress Energy Inc. Consolidated Statements of Operations and Comprehensive Income (Loss) For the years ended December 31, 2021, 2020 and 2019 (in thousands of U.S. dollars, except share and per share amounts) Year Ended December 31, 2021 2020 2019 Revenues Operating revenue $ 930,816 $ 318,311 $ 145,500 Vessel charter revenue 230,809 - - Other revenue 161,185 133,339 43,625 Total revenues 1,322,810 451,650 189,125 Operating expenses Cost of sales 616,010 278,767 183,359 Vessel operating expenses 51,677 - - Operations and maintenance 73,316 47,581 26,899 Selling, general and administrative 199,881 120,142 152,922 Transaction and integration costs 44,671 4,028 - Contract termination charges and loss on mitigation sales - 124,114 5,280 Depreciation and amortization 98,377 32,376 7,940 Total operating expenses 1,083,932 607,008 376,400 Operating income (loss) 238,878 ( 155,358 ) ( 187,275 ) Interest expense 154,324 65,723 19,412 Other (income) expense, net ( 17,150 ) 5,005 ( 2,807 ) Loss on extinguishment of debt, net 10,975 33,062 - Net income (loss) before income from equity method investments and income taxes 90,729 ( 259,148 ) ( 203,880 ) Income from equity method investments 14,443 - - Tax provision 12,461 4,817 439 Net income (loss) 92,711 ( 263,965 ) ( 204,319 ) Net loss attributable to non-controlling interest 4,393 81,818 170,510 Net income (loss) attributable to stockholders $ 97,104 $ ( 182,147 ) $ ( 33,809 ) Net income (loss) per share – basic $ 0.49 $ ( 1.71 ) $ ( 1.62 ) Net income (loss) per share – diluted $ 0.47 $ ( 1.71 ) $ ( 1.62 ) Weighted average number of shares outstanding – basic 198,593,042 106,654,918 20,862,555 Weighted average number of shares outstanding – diluted 201,703,176 106,654,918 20,862,555 Other comprehensive income (loss): Net income (loss) $ 92,711 $ ( 263,965 ) $ ( 204,319 ) Currency translation adjustment 3,489 ( 2,005 ) 219 Comprehensive income (loss) 89,222 ( 261,960 ) ( 204,538 ) Comprehensive loss attributable to non-controlling interest 5,615 80,025 170,699 Comprehensive income (loss) attributable to stockholders $ 94,837 $ ( 181,935 ) $ ( 33,839 ) The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents New Fortress Energy Inc. Consolidated Statements of Changes in Stockholders’ Equity For the years ended December 31, 2021, 2020 and 2019 (in thousands of U.S. dollars, except per share amounts) Members’ Capital Class A shares Class B shares Class A common stock Additional paid-in Accumulated Accumulated other comprehensive Non-controlling Total stockholders’ Units Amounts Shares Amount Shares Amount Shares Amount capital deficit (loss) income Interest equity Balance as of January 1, 2019 67,983,095 $ 426,741 - $ - - $ - - $ - $ - $ ( 158,423 ) $ ( 11 ) $ 14,340 $ 282,647 Activity prior to the IPO and related organizational transactions: Net loss - - - - - - - - - ( 7,923 ) 11 ( 91 ) ( 8,003 ) Effects of the IPO and related organizational transactions: Issuance of Class A shares in the IPO, net of underwriting discount and offering costs - - 20,837,272 32,136 - - - - - - - 235,874 268,010 Effects of the reorganization transactions ( 67,983,095 ) ( 426,741 ) - 51,092 147,058,824 - - - - 146,420 - 229,229 - Activity subsequent to the IPO and related organizational transactions: Net loss - - - - - - - - - ( 25,897 ) - ( 170,419 ) ( 196,316 ) Other comprehensive loss - - - - - - - - - - ( 30 ) ( 189 ) ( 219 ) Share-based compensation expense - - - 41,205 - - - - - - - - 41,205 Exchange of NFI units - - 2,716,252 6,225 ( 2,716,252 ) - - - - - - ( 6,225 ) - Issuance of shares for vested RSUs - - 53,572 - - - - - - - - - - Balance as of December 31, 2019 - - 23,607,096 130,658 144,342,572 - - - - ( 45,823 ) ( 30 ) 302,519 387,324 Cumulative effect of accounting changes - - - - - - - - - ( 1,533 ) - ( 7,780 ) ( 9,313 ) Class A stock issued, net of issuance costs - - - - - - 5,882,352 59 290,712 - - - 290,771 Net loss - - - - - - - - - ( 182,147 ) - ( 81,818 ) ( 263,965 ) Other comprehensive income - - - - - - - - - - 212 1,793 2,005 Share-based compensation expense - - - 4,430 - - - - 4,313 - - - 8,743 Issuance of shares for vested RSUs - - 1,224,436 - - - 160,317 - - - - - - Shares withheld from employees related to share-based compensation, at cost - - - - - - ( 593,911 ) - ( 6,468 ) - - - ( 6,468 ) Exchange of NFI units - - 144,342,572 206,587 ( 144,342,572 ) - - - - - - ( 206,587 ) - Conversion from LLC to Corporation - - ( 169,174,104 ) ( 341,675 ) - - 169,174,104 1,687 339,988 - - - - Dividends - - - - - - - - ( 34,011 ) - - - ( 34,011 ) Balance as of December 31, 2020 - - - - - - 174,622,862 1,746 594,534 ( 229,503 ) 182 8,127 375,086 Net income (loss) - - - - - - - - - 97,104 - ( 4,393 ) 92,711 Other comprehensive loss - - - - - - - - - - ( 2,267 ) ( 1,222 ) ( 3,489 ) Share-based compensation expense - - - - - - - - 37,043 - - - 37,043 Shares issued as consideration in business combinations - - - - - - 31,372,549 314 1,400,470 - - - 1,400,784 Issuance of shares for vested RSUs - - - - - - 1,537,910 9 ( 9 ) - - - - Shares withheld from employees related to share-based compensation, at cost - - - - - - ( 670,079 ) - ( 28,214 ) - - - ( 28,214 ) Non-controlling interest acquired in business combinations - - - - - - - - - - - 236,570 236,570 Deconsolidation of the Eskimo SPV - - - - - - - - - - - ( 28,049 ) ( 28,049 ) Dividends - - - - - - - - ( 79,834 ) - - ( 8,554 ) ( 88,388 ) Balance as of December 31, 2021 - $ - - $ - - $ - 206,863,242 $ 2,069 $ 1,923,990 $ ( 132,399 ) $ ( 2,085 ) $ 202,479 $ 1,994,054 The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents New Fortress Energy Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2021, 2020 and 2019 (in thousands of U.S. dollars) Year Ended December 31, 2021 2020 2019 Cash flows from operating activities Net income (loss) $ 92,711 $ ( 263,965 ) $ ( 204,319 ) Adjustments for: Amortization of deferred financing costs and debt guarantee, net 14,116 10,519 5,873 Depreciation and amortization 99,544 33,303 8,641 (Earnings) of equity method investees ( 14,443 ) - - Dividends received from equity method investees 21,365 - - Sales-type lease payments received in excess of interest income 2,348 - - Change in market value of derivatives ( 8,691 ) - - Contract termination charges and loss on mitigation sales - 19,114 2,622 Loss on extinguishment and financing expenses 10,975 37,090 - Deferred taxes ( 8,825 ) 2,754 392 Change in value of Investment of equity securities ( 8,254 ) - - Share-based compensation 37,043 8,743 41,205 Other ( 5,271 ) 4,341 1,247 Changes in operating assets and liabilities, net of acquisitions: (Increase) in receivables ( 123,583 ) ( 26,795 ) ( 19,754 ) (Increase) Decrease in inventories ( 11,152 ) 23,230 ( 50,345 ) (Increase) in other assets ( 1,839 ) ( 35,927 ) ( 39,344 ) Decrease in right-of-use assets 28,576 41,452 - Increase in accounts payable/accrued liabilities 17,527 55,514 3,036 Increase (Decrease) in amounts due to affiliates 108 ( 1,272 ) 5,771 (Decrease) in lease liabilities ( 36,126 ) ( 42,094 ) - (Decrease) Increase in other liabilities ( 21,359 ) 8,427 10,714 Net cash provided by (used in) operating activities 84,770 ( 125,566 ) ( 234,261 ) Cash flows from investing activities Capital expenditures ( 669,348 ) ( 156,995 ) ( 377,051 ) Cash paid for business combinations, net of cash acquired ( 1,586,042 ) - - Entities acquired in asset acquisitions, net of cash acquired ( 8,817 ) - - Other investing activities ( 9,354 ) ( 636 ) 887 Net cash used in investing activities ( 2,273,561 ) ( 157,631 ) ( 376,164 ) Cash flows from financing activities Proceeds from borrowings of debt 2,434,650 2,095,269 347,856 Payment of deferred financing costs ( 37,811 ) ( 36,499 ) ( 8,259 ) Repayment of debt ( 461,015 ) ( 1,490,002 ) ( 5,000 ) Proceeds from IPO - - 274,948 Proceeds from issuance of Class A common stock - 291,992 - Payments related to tax withholdings for share-based compensation ( 30,124 ) ( 6,413 ) - Payment of dividends ( 88,756 ) ( 33,742 ) - Payment of stock issuance costs - ( 1,107 ) ( 6,938 ) Net cash provided by financing activities 1,816,944 819,498 602,607 Impact of changes in foreign exchange rates on cash and cash equivalents 6,541 - - Net (decrease) increase in cash, cash equivalents and restricted cash ( 365,306 ) 536,301 ( 7,818 ) Cash, cash equivalents and restricted cash – beginning of period 629,336 93,035 100,853 Cash, cash equivalents and restricted cash – end of period $ 264,030 $ 629,336 $ 93,035 Supplemental disclosure of non-cash investing and financing activities: Changes in accounts payable and accrued liabilities associated with construction in progress and property, plant and equipment additions $ 108,790 $ ( 12,786 ) $ ( 48,150 ) Liabilities associated with consideration paid for entities acquired in asset acquisitions 10,520 - - Consideration paid in shares for business combinations 1,400,784 - - Cash paid for interest, net of capitalized interest 154,249 27,255 6,765 Cash paid for taxes 17,319 58 28 The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents 1. Organization New Fortress Energy Inc. (“NFE,” together with its subsidiaries, the “Company”), a Delaware corporation, 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 has liquefaction, regasification and power generation op erations in the United States, Jamaica, Brazil and Mexico . Subsequent to the Mergers (defined below), the Company has marine operations with vessels operating under time charters and in the spot market globally. On April 15, 2021, the Company completed the acquisitions of Hygo Energy Transition Ltd. (“Hygo”) and Golar LNG Partners LP (“GMLP”); referred to as the “Hygo Merger” and “GMLP Merger,” respectively and, collectively, the “Mergers”. NFE paid $ 580 million in cash and issued 31,372,549 shares of Class A common stock to Hygo’s shareholders in connection with the Hygo Merger. NFE paid $ 3.55 per each common unit of GMLP outstanding and for each of the outstanding membership interests of GMLP’s general partner, totaling $ 251 million. The Company also repaid certain outstanding debt facilities of GMLP in conjunction with closing the GMLP Merger. The results of operations of Hygo and GMLP and their subsidiaries have been included in the Company’s consolidated financial statements for the period subsequent to the Mergers. As a result of the Hygo Merger, the Company acquired a 50 % interest in a 1.5GW power plant in Sergipe, Brazil (the “Sergipe Power Plant”) and its operating FSRU terminal in Sergipe, Brazil (the “Sergipe Facility”), as well as the Barcarena Facility and Barcarena Power Plant, the Santa Catarina Facility and the Nanook , a newbuild FSRU moored and in service at the Sergipe Facility. As a result of the GMLP Merger, the Company acquired a fleet of six other FSRUs, six LNG carriers and an interest in a floating liquefaction vessel, the Hilli Episeyo (the “Hilli”), each of which are expected to help support the Company’s existing facilities and international project pipeline. The majority of the FSRUs are operating in Brazil, Kuwait, Indonesia, Jamaica and Jordan under time charters, and uncontracted vessels are available for short term employment in the spot market. The Company currently conducts its business through two operating segments, Terminals and Infrastructure and Ships. The business and reportable segment information reflect how the Chief Operating Decision Maker (“CODM”) regularly reviews and manages the business. 2. Significant accounting policies The principal accounting policies adopted are set out below. (a) Basis of presentation and principles of consolidation The accompanying consolidated financial statements contained herein were prepared in accordance with accounting principles generally accepted in the United States of America (“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. A variable interest entity (“VIE”) is an entity that by design meets any of the following characteristics: (1) lacks sufficient equity to allow the entity to finance its activities without additional subordinated financial support; (2) as a group, equity investors do not have the ability to make significant decisions relating to the entity’s operations through voting rights, do not have the obligation to absorb the expected losses or do not have the right to receive residual returns of the entity; or (3) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is required to consolidate the assets and liabilities of the VIE. The primary beneficiary is the party that has both (1) the power to direct the economic activities of the VIE that most significantly impact the VIE’s economic performance; and (2) through its interest in the VIE, the obligation to absorb the losses or the right to receive the benefits from the VIE that could potentially be significant to the VIE. The sale and leaseback financings of certain vessels acquired in the Mergers were consummated with VIEs. As part of these financings, the asset was sold to a single asset entity of the lending bank and then leased back. While the Company does not hold an equity investment in these lending entities, these entities are VIEs, and the Company has a variable interest in these lending entities due to the guarantees and fixed price repurchase options that absorb the losses of the VIE that could potentially be significant to the entity. The Company has concluded that it has the power to direct the economic activities that most impact the economic performance as it controls the significant decisions relating to the assets and it has the obligation to absorb losses or the right to receive the residual returns from the leased asset. Therefore, the Company consolidates these lending entities; as NFE has no equity interest in these VIEs, all equity attributable to these VIEs is included in non-controlling interest in the consolidated financial statements. Transactions between our wholly-owned subsidiaries and these VIEs are eliminated in consolidation, including sale leaseback transactions. Noncontrolling interests are classified as a separate component of equity on the consolidated balance sheets and consolidated statements of changes in stockholders’ equity. Additionally, net income (loss) and comprehensive income (loss) attributable to noncontrolling interests are reflected separately from consolidated net income (loss) and comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss) and consolidated statements of changes in stockholders’ equity. Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the controlling and noncontrolling interests. Losses continue to be attributed to the noncontrolling interests, even when the noncontrolling interests’ basis has been reduced to zero . F-9 Table of Contents (b) Use of estimates 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, 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. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates. (c) Foreign currencies The Company has certain foreign subsidiaries in which the functional currency is the local currency. 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. dollar. 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) expense, net in the consolidated statements of operations and comprehensive income (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. (d) Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. (e) Restricted cash 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. F-10 Table of Contents (f) Receivables 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 income (loss). (g) Inventories 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 income (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 income (loss) in instances where gas cannot be contained and recycled back into the production process. (h) 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 are associated with activities that could be utilized in future projects. Depreciation is not recognized during the construction period. The interest cost associated with major development and construction projects is capitalized during the construction period and included in the cost of the project in Construction in progress. (i) Property, plant and equipment, net Property, plant and equipment is initially recorded at cost. Expenditures for construction activities and betterments that extend the useful life of the asset are capitalized. Vessel refurbishment costs are capitalized and depreciated over the vessels’ remaining useful economic lives. Refurbishment costs increase the capacity or improve the efficiency or safety of vessels and equipment. Expenditures for routine maintenance and repairs for assets in the Terminals and Infrastructure segment are charged to expense as incurred within Operations and maintenance in the consolidated statements of operations and comprehensive income (loss); such expenditures for assets in the Ships segment that do not improve the operating efficiency or extend the useful lives of the vessels are expensed as incurred within Vessel operating expenses. Major maintenance and overhauls of the Company’s power plant and terminals are capitalized and depreciated over the expected period until the next anticipated major maintenance or overhaul. Drydocking expenditures are capitalized when incurred and amortized over the period until the next anticipated drydocking, which is generally five years . For vessels, the Company utilizes the “built-in overhaul” method of accounting. The built-in overhaul method is based on the segregation of vessel costs into those that should be depreciated over the useful life of the vessel and those that require drydocking at periodic intervals to reflect the different useful lives of the components of the assets. The estimated cost of the drydocking component is depreciated until the date of the first drydocking following acquisition of the vessel, upon which the cost is capitalized and the process is repeated. If drydocking occurs prior to the expected timing, a cumulative adjustment to recognize the change in expected timing of drydocking is recognized within Depreciation and amortization in the consolidated statements of operations and comprehensive income (loss). F-11 Table of Contents The Company depreciates property, plant and equipment less the estimate residual value 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) Vessels 5 - 30 Terminal and power plant equipment 4 - 24 CHP facilities 4 - 20 Gas terminals 5 - 24 ISO containers and associated equipment 3 - 25 LNG liquefaction facilities 20 - 40 Gas pipelines 4 - 24 Leashold improvements 2 - 20 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 income (loss). When a vessel is disposed, any unamortized drydocking expenditure is recognized as part of the gain or loss on disposal in the period of disposal. (j) Impairment of long-lived assets 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. 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 not identify any indicators of impairment and did no t record an impairment during the years ended December 31, 2021, 2020 and 2019. (k) Investments in equity securities Investments in equity securities are 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 (income) expense, net in the consolidated statements of operations and comprehensive income (loss). (l) 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 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 income (loss). (m) Goodwill Goodwill includes the excess of the purchase price over the fair value of the net tangible and intangible assets associated with the Mergers. The Company reviews the carrying values of goodwill at least annually to assess impairment since these assets are not amortized. An annual impairment review is conducted as of October 1 st of each year. Additionally, the Company reviews the carrying value of goodwill whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. F-12 Table of Contents For an annual goodwill impairment assessment, an optional qualitative analysis may be performed. If the option is not elected or if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step goodwill impairment test is performed to identify potential goodwill impairment and to measure an impairment loss. A qualitative analysis was elected for the year ended December 31, 2021. A goodwill impairment assessment compares the fair value of a respective reporting unit with its carrying amount, including goodwill. The estimate of fair value of the respective reporting unit is based on the best information available as of the date of assessment, which primarily incorporates assumptions about operating results, business plans, income projections, anticipated future cash flows and market data. If goodwill is determined to be impaired, an impairment loss, measured at the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill, is recorded. There was no impairment of goodwill for the year ended December 31, 2021. (o) Long-term debt and debt issuance costs 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. Unamortized debt issuance costs associated with the revolving credit agreement, commercial paper and other similar arrangements are presented as an asset (regardless of whether there are any amounts outstanding under the credit facility) and amortized over the life of the particular arrangement. 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. (p) 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 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. Gain contingencies are not recorded until realized. (q) Revenue recognition Terminals and Infrastructure Within the Terminals and Infrastructure segment, the Company’s contracts with customers may contain one or several performance obligations usually consisting of the sale of LNG, natural gas, power and steam, which are outputs from the Company’s natural gas-fueled infrastructure and the sale of LNG cargos. 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 delivered in containers transported by truck to customer sites but may also be delivered via vessel to an unloading point specified in a contract. Revenue from sales of LNG is recognized at the point in time at which physical possession and the risks and rewards of ownership transfer to the customer, 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, which may be accounted for as a finance or operating lease. For the Company’s operating leases, the Company has elected the practical expedient to combine revenue for the sale of natural gas or LNG and operating lease income as the timing and pattern of transfer of the components are the same. The Company has concluded that the predominant component of the transaction is the sale of natural gas or LNG and therefore has not separated the lease component. The lease component of such operating leases is recognized as Operating revenue in the consolidated statements of operations and comprehensive income (loss). The Company allocates consideration in agreements containing finance leases 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. F-13 Table of Contents 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 income (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 income (loss). The principal component of the lease payment is reflected as a reduction to the net investment in the lease. In addition to the revenue recognized from the finance lease 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. Contract assets are comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent periods. 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. 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 income (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. Ships Charter contracts for the use of the FSRUs and LNG carriers acquired as part of the Mergers are leases as the contracts convey the right to obtain substantially all of the economic benefits from the use of the asset and allow the customer to direct the use of that asset. At inception, the Company makes an assessment on whether the charter contract is an operating lease or a finance lease. In making the classification assessment, the Company estimates the residual value of the underlying asset at the end of the lease term with reference to broker valuations. None of the vessel lease contracts contain residual value guarantees. Renewal periods and termination options are included in the lease term if the Company believes such options are reasonably certain to be exercised by the lessee. Generally, lease accounting commences when the asset is made available to the customer, however, where the contract contains specific customer acceptance testing conditions, the lease will not commence until the asset has successfully passed the acceptance test. The Company assesses leases for modifications when there is a change to the terms and conditions of the contract that results in a change in the scope or the consideration of the lease. For charter contracts that are determined to be finance leases accounted for as sales-type leases, the profit from the sale of the vessel is recognized upon lease commencement in Other revenue in the consolidated statements of operations and comprehensive income (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 income (loss). The principal component of the lease payment is reflected as a reduction to the net investment in the lease. Revenue related to operating and service agreements in connection with charter contracts accounted for as sales-type leases are recognized over the term of the charter as the service is provided within Vessel charter revenue in the consolidated statements of operations and comprehensive income (loss). F-14 Table of Contents Revenue includes lease payments under charters accounted for as operating leases and fees for repositioning vessels. Revenue generated from charters contracts is recorded over the term of the charter on a straight-line basis as service is provided and is included in Vessel charter revenue in the consolidated statements of operations and comprehensive income (loss). Lease payments include fixed payments (including in-substance fixed payments that are unavoidable) and variable payments based on a rate or index. For operating leases, the Company has elected the practical expedient to combine service revenue and operating lease income as the timing and pattern of transfer of the components are the same. Variable lease payments are recognized in the period in which the circumstances on which the variable lease payments are based become probable or occur. Repositioning fees are included in Vessel charter revenues and are recognized at the end of the charter when the fee becomes fixed. However, where there is a fixed amount specified in the charter, which is not dependent upon redelivery location, the fee is recognized evenly over the term of the charter. Costs directly associated with the execution of the lease or costs incurred after lease inception but prior to the commencement of the lease that directly relate to preparing the asset for the contract are capitalized and amortized in Vessel operating expenses in the consolidated statements of operations and comprehensive income (loss) over the lease term. The Company’s LNG carriers may participate in an LNG carrier pool collaborative arrangement with Golar LNG Limited, referred to as the Cool Pool. The Cool Pool allows the pool participants to optimize the operation of the pool vessels through improved scheduling ability, cost efficiencies and common marketing. Under the Pool Agreement, the Pool Manager is responsible, as an agent, for the marketing and chartering of the participating vessels and paying certain voyage costs such as port call expenses and brokers’ commissions in relation to employment contracts, with each of the pool participants continuing to be fully responsible for fulfilling the performance obligations in the contract. The Company is primarily responsible for fulfilling the performance obligations in the time charters of vessels owned by the Company, and the Company is the principal in such time charters. Revenue and expenses for charters of the Company’s vessels that participate in the Cool Pool are presented on a gross basis within Vessel charter revenues and Vessel operating expenses, respectively, in the consolidated statements of operations and comprehensive income (loss). The Company’s allocation of its share of the net revenues earned from the other pool participants’ vessels, which may be either income or expense depending on the results of all pool participants, is reflected on a net basis within Vessel operating expenses in the consolidated statements of operations and comprehensive income (loss). (r) Leases, as lessee Effective January 1, 2020, the Company adopt ed Accounting Standards Update (“ASU”) 2016 -02, Leases (Topic 842), using the modified retrospective approach. The Company has entered into lease agreements for the use of LNG vessels, marine port space, office space, land and equipment. 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 Leases . F-15 Table of Contents (s) Share-based compensation The Company adopted the New Fortress Energy Inc. 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 affiliates. The Company accounts for share-based compensation in accordance with ASC 718, 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 and 2021, the Company granted performance share units (“PSUs”) to certain employees and non-employees. The PSUs contain a performance condition, and vesting is determined based on achievement of a performance metric in the year subsequent to the grant. Compensation expense is recognized on a straight-line basis over the service period based on the expected attainment of a performance metric. At each reporting period, the Company reassesses the probability of the achievement of the performance metric, and any increase or decrease in share-based compensation expense resulting from an adjustment in the number of shares expected to vest is treated as a cumulative catch-up in the period of adjustment . (t) Lessor expense recognition Vessel operating expenses, which are recognized when incurred, include crewing, repairs and maintenance, insurance, stores, lube oils, communication expenses and third-party management fees. Voyage expenses principally consist of fuel consumed before or after the term of time charter or when the vessel is off hire. Under time charters, the majority of voyage expenses are paid by customers. To the extent that these costs are a fixed amount specified in the charter, which is not dependent upon redelivery location, the estimated voyage expenses are recognized over the term of the time charter. Initial direct costs include costs directly related to the negotiation and consummation of the lease are deferred and recognized in Vessel operating expenses over the lease term. (u) Transaction and integration costs Transaction and integration costs is comprised of costs related to business combinations and include advisory, legal, accounting, valuation and other professional or consulting fees. This caption also includes gains or losses recognized in connection with business combinations, including the settlement of preexisting relationships between the Company and an acquired entity. Financing costs which are not deferred as part of the cost of the financing on the balance sheet are recognized within this caption including fees associated with debt modifications. (v) Contract termination charges and loss 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 income (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. We did no t have such transactions during the year ended December 31, 2021. F-16 Table of Contents (w) Taxation 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. The Company recognizes the effect of tax positions only if those positions are more likely than not of being sustained. Recognized tax positions are measured at the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement with the relevant tax authority. 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. 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. Other taxes 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 expense (income), net in the consolidated statements of operations and comprehensive income (loss). (x) Net income (loss) per share Basic net income (loss) per share (“EPS”) is computed by dividing net income (loss) attributable to Class A common stock by the weighted average number of shares of Class A common stock outstanding. 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. (y) Acquisitions Business combinations are accounted for under the acquisition method. On acquisition, the identifiable assets acquired and liabilities assumed are measured at their fair values at the date of acquisition. Any excess of the purchase price over the fair values of the identifiable net assets acquired is recognized as goodwill. Acquisition related costs are expensed as incurred as Transaction and integration costs in the statements of operations and comprehensive income (loss). The results of operations of acquired businesses are included in the Company’s consolidated statements of operations and comprehensive income (loss) from the date of acquisition. If the assets acquired do not meet the definition of a business, the transaction is accounted for as an asset acquisition and no goodwill is recognized. Costs incurred in conjunction with asset acquisitions are included in the purchase price, and any excess consideration transferred over the fair value of the net assets acquired is reallocated to the identifiable assets based on their relative fair values. (z) Equity method investments The Company accounts for investments in entities over which the Company has significant influence, but do not meet the criteria for consolidation, under the equity method of accounting. Under the equity method of accounting, the Company’s investment is recorded at cost, or in the case of equity method investments acquired as part of the Mergers, at the acquisition date fair value of the investment. The carrying amount is adjusted for the Company’s share of the earnings or losses, and dividends received from the investee reduce the carrying amount of the investment. The Company allocates the difference between the fair value of investments acquired in the Mergers and the Company’s proportionate share of the carrying value of the underlying assets, or basis difference, across the assets and liabilities of the investee. The basis difference assigned to amortizable net assets is included in Income (loss) from equity method investments in the consolidated statements of operations and comprehensive income (loss). When the Company’s share of losses in an investee equals or exceeds the carrying value of the investment, no further losses are recognized unless the Company has incurred obligations or made payments on behalf of the investee. The Company periodically assesses if impairment indicators exist at our equity method investments. When an impairment is observed, any excess of the carrying amount over its estimated fair value is recognized as impairment expense when the loss in value is deemed other-than-temporary and included in Other (income) expense, net in the consolidated statements of operations and comprehensive income (loss) . F-17 Table of Contents (aa) Loss of control of subsidiary When there is a loss of control over a subsidiary, the Company de-consolidates as of the date the Company ceases to have a financial interest. The Company accounts for the deconsolidation of a subsidiary by recognizing a gain or loss in the consolidated statements of operations and comprehensive income (loss), measured by the difference between the aggregate of the fair value of the consolidation received, fair value of any retained non-controlling interest in the former subsidiary and the carrying amount of any non-controlling interest in the former subsidiary with the carrying amount of the former subsidiary’s assets and liabilities. If a change of ownership interest causes a loss of control of a foreign entity, in addition to de-recognizing the assets and liabilities, the Company also de-recognize any amounts previously recorded in other comprehensive income (loss). (ab) Guarantees Guarantees issued by the Company, excluding those that are guaranteeing the Company’s own performance, are recognized at fair value at the time that the guarantees are issued and recognized in Other current liabilities and Other non-current liabilities on the consolidated balance sheets. The guarantee liability is amortized each period as a reduction to Selling, general and administrative expenses. If it becomes probable that the Company will have to perform under a guarantee, the Company will recognize an additional liability if the amount of the loss can be reasonably estimated. (ac) Derivatives As part of the Mergers, the Company acquired derivative positions that were used to reduce market risks associated with interest rates and foreign exchange rates. The Company also accounts for arrangements that require the Company to pay sellers contingent payments in asset acquisitions as derivatives. All derivative instruments are initially recorded at fair value as either assets or liabilities on the consolidated balance sheets and subsequently remeasured to fair value, regardless of the purpose or intent for holding the derivative, unless they qualify for a Normal Purchases and Normal Sales (“NPNS”) exception. The Company has not designated any derivates as cash flow or fair value hedges; however, certain instruments may be considered economic hedges. Revenues and expenses on contracts that qualify for the NPNS exception are recognized when the underlying physical transaction is delivered. While these contracts are considered derivative financial instruments under ASC 815, Derivatives and Hedging , they are not recorded at fair value, but on an accrual basis of accounting. If it is determined that a transaction designated as NPNS no longer meets the scope exception, the fair value of the related contract is recorded on the balance sheet and immediately recognized through earnings. 3. Adoption of new and revised standards (a) New standards, amendments and interpretations issued but not effective for the year beginning January 1, 2021: In August 2020, the Financial Accounting Standards Board (“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, Earnings per Share , 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 will adopt this guidance in the first quarter of 2022 and does not expect it to have a material impact on the Company’s financial position, results of operations or cash flows. (b) New and amended standards adopted by the Company: In December 2019, 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 adoption of this guidance in the first quarter of 2021 did not have a material impact on the Company’s financial position, results of operations or cash flows. F-18 Table of Contents 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 current accounting 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. Refer to Note 5. VIEs and Note 19. Debt for discussion of the use of the London Interbank Offered Rate (“LIBOR”) in connection with the Company’s financing arrangements. The majority of the Company’s debt facilities include fallback provisions that contemplate the replacement of LIBOR. The discontinuation of LIBOR will require these arrangements to be modified to utilize an alternative interest rate. The Company has made a policy election to adopt the optional expedients related to contract modifications related to its debt and certain other arrangements and will apply the relief on a prospective basis as modifications are made. The Company continues to monitor the activities of regulators and financial institutions to transition to an alternative reference rate and to review additional arrangements for references to LIBOR. Accordingly, the Company may make additional optional elections in the future. 4. Acquisitions Hygo Merger On April 15, 2021, the Company completed the acquisition of all of the outstanding common and preferred shares representing all voting interests of Hygo, a 50 - 50 joint venture between Golar LNG Limited (“GLNG”) and Stonepeak Infrastructure Fund II Cayman (G) Ltd., a fund managed by Stonepeak Infrastructure Partners (“Stonepeak”), in exchange for 31,372,549 shares of NFE Class A common stock and $ 580,000 in cash. The acquisition of Hygo expands the Company’s footprint in South America with three gas-to-power projects in Brazil’s large and fast-growing market. Based on the closing price of NFE’s common stock on April 15, 2021, the total value of consideration in the Hygo Merger was $ 1.98 billion, shown as follows: Consideration As of April 15, 2021 Cash consideration for Hygo Preferred Shares $ 180,000 Cash consideration for Hygo Common Shares 400,000 Total Cash Consideration $ 580,000 Merger consideration to be paid in shares of NFE Common Stock 1,400,784 Total Non-Cash Consideration 1,400,784 Total Consideration $ 1,980,784 The Company has determined it is the accounting acquirer of Hygo, which will be accounted for under the acquisition method of accounting for business combinations. The total purchase price of the transaction has been allocated to identifiable assets acquired, liabilities assumed and non-controlling interests of Hygo based on their respective estimated fair values as of the closing date. F-19 Table of Contents The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment, including determining the appropriate assumptions and estimates. As of December 31, 2021, the allocation of the purchase price is preliminary due to the finalization of the evaluation of tax related matters. The purchase price allocation will be finalized once such matters have been resolved. Accordingly, the fair value estimates presented below relating to this item is subject to change within the measurement period not to exceed one year from the date of acquisition. Fair values assigned to the assets acquired, liabilities assumed and non-controlling interests of Hygo as of the closing date were as follow s: Hygo As of April 15, 2021 Assets Acquired Cash and cash equivalents $ 26,641 Restricted cash 48,183 Accounts receivable 5,126 Inventory 1,022 Other current assets 8,095 Assets under development 128,625 Property, plant and equipment, net 385,389 Equity method investments 823,521 Finance leases, net 601,000 Deferred tax assets, net 1,065 Other non-current assets 52,996 Total assets acquired: $ 2,081,663 Liabilities Assumed Current portion of long-term debt $ 38,712 Accounts payable 3,059 Accrued liabilities 39,149 Other current liabilities 13,495 Long-term debt 433,778 Deferred tax liabilities, net 254,949 Other non-current liabilities 21,520 Total liabilities assumed: 804,662 Non-controlling interest 40,414 Net assets acquired: 1,236,587 Goodwill $ 744,197 For the year ended December 31, 2021, the Company made certain measurement period adjustments to the assets acquired, liabilities assumed and non-controlling interests of Hygo due to additional information utilized to determine fair value during the measurement period. The measurement period adjustment impacted the fair value of debt assumed, including associated impacts to non-controlling interests and deferred tax liabilities. The measurement period adjustment decreased goodwill by $ 2,740 , and the Company recognized additional interest expense of $ 1,088 for the year ended December 31, 2021. The fair value of Hygo’s non-controlling interest (“NCI”) as of April 15, 2021 was $ 40,414 , including the fair value of the net assets of VIEs that Hygo has consolidated. These VIEs are special purpose vehicles (“SPV”) for the sale and leaseback of certain vessels, and Hygo has no equity investment in these entities. The fair value of NCI was determined based on the valuation of the SPV’s external debt and the lease receivable asset associated with the sales leaseback transaction with Hygo’s subsidiary, using a discounted cash flow method. The fair value of receivables acquired from Hygo is $ 8,009 , which approximates the gross contractual amount; no material amounts are expected to be uncollectible. Goodwill is calculated as the excess of the purchase price over the net assets acquired. Goodwill represents access to additional LNG and natural gas distribution systems and power markets, including workforce that will allow the Company to rapidly develop and deploy LNG to power solutions. While the goodwill is not deductible for local tax purposes, it is treated as an amortizable expense for the U.S. global intangible low-taxed income (“GILTI”) computation. The Company’s results of operations for the year ended December 31, 2021 include Hygo’s result of operations from the date of acquisition, April 15, 2021, through December 31, 2021. Revenue and net income attributable to Hygo during the period was $ 67,089 and $ 4,551 , respectively. GMLP Merger On April 15, 2021, the Company completed the acquisition of all of the outstanding common units, representing all voting interests, of GMLP in exchange for $ 3.55 in cash per common unit and for each of the outstanding membership interest of GMLP’s general partner. In conjunction with the closing of the GMLP Merger, NFE simultaneously extinguished a portion of GMLP’s debt for total consideration of $ 1.15 billion. F-20 Table of Contents With the acquisition of GMLP, the Company gained vessels to support the existing terminals and business development pipeline, as well as an interest in a floating natural gas liquefaction facility (“FLNG”), which is expected to provide consistent cash flow streams under a long-term tolling arrangement. The interest in the FLNG facility also provides the Company access to intellectual property that will be used to develop future FLNG solutions. The consideration paid by the Company in the GMLP Merger was as follows: Consideration As of April 15, 2021 GMLP Common Units ($ 3.55 per unit x 69,301,636 units) $ 246,021 GMLP General Partner Interest ($ 3.55 per unit x 1,436,391 units) 5,099 Partnership Phantom Units ($ 3.55 per unit x 58,960 units) 209 Cash Consideration $ 251,329 GMLP debt repaid in acquisition 899,792 Total Cash Consideration 1,151,121 Cash settlement of preexisting relationship ( 3,978 ) Total Consideration $ 1,147,143 The Company has determined it is the accounting acquirer of GMLP, which will be accounted for under the acquisition method of accounting for business combinations. The total purchase price of the transaction has been allocated to identifiable assets acquired, liabilities assumed and non-controlling interests of GMLP based on their respective estimated fair values as of the closing date. The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment, including determining the appropriate assumptions and estimates. As of December 31, 2021, the allocation of the purchase price is preliminary due to the finalization of the evaluation of tax related matters. The purchase price allocation will be finalized once such matters have been resolved. Accordingly, the fair value estimates presented below relating to this item is subject to change within the measurement period not to exceed one year from the date of acquisition. Fair values assigned to the assets acquired, liabilities assumed and non-controlling interests of GMLP as of the closing date were as follows: GMLP As of April 15, 2021 Assets Acquired Cash and cash equivalents $ 41,461 Restricted cash 24,816 Accounts receivable 3,195 Inventory 2,151 Other current assets 2,789 Equity method investments 355,500 Property, plant and equipment, net 1,063,215 Intangible assets, net 106,500 Deferred tax assets, net 963 Other non-current assets 4,400 Total assets acquired: $ 1,604,990 Liabilities Assumed Current portion of long-term debt $ 158,073 Accounts payable 3,019 Accrued liabilities 17,226 Other current liabilities 73,774 Deferred tax liabilities, net 14,907 Other non-current liabilities 10,630 Total liabilities assumed: 277,629 Non-controlling interest 196,156 Net assets to be acquired: 1,131,205 Goodwill $ 15,938 F-21 Table of Contents For the year ended December 31, 2021, the Company made certain measurement period adjustments to the assets acquired, liabilities assumed and non-controlling interests of GMLP due to additional information utilized to determine fair value during the measurement period. The measurement period adjustments impacted the fair value of intangible assets acquired and debt assumed, including associated impacts to deferred tax liabilities and non-controlling interests . The measurement period adjustments increased goodwill by $ 14,273 , and the Company recognized amortization of $ 11,119 of the discount on debt and amortization of $ 415 of intangibles as an addition to interest expense and amortization expense, respectively, for the period after the GMLP Merger. The fair value of GMLP’s NCI as of April 15, 2021 was $ 196,156 , which represents the fair value of other investors’ interest in the Mazo, GMLP’s preferred units which were not acquired by the Company and the fair value of net assets of an SPV formed for the purpose of a sale and leaseback of the Eskimo. The fair value of GMLP’s preferred units and the valuation of the SPV’s external debt and the lease receivable asset associated with the sale leaseback transaction have been estimated using a discounted cash flow method. The fair value of receivables acquired from GMLP is $ 4,797 , which approximates the gross contractual amount; no material amounts are expected to be uncollectible. The Company acquired favorable and unfavorable leases for the use of GMLP’s vessels. The fair value of the favorable contracts is $ 106,500 and the fair value of the unfavorable contracts is $ 13,400 . The total weighted average amortization period is approximately three years ; the favorable contract asset has a weighted average amortization period of approximately three years and the unfavorable contract liability has a weighted average amortization period of approximately one year . The Company and GMLP had an existing lease agreement prior to the GMLP Merger. As a result of the acquisition, the lease agreement and any associated receivable and payable balances were effectively settled. The lease agreement also included provisions that required a subsidiary of NFE to indemnify GMLP to the extent that GMLP incurred certain tax liabilities as a result of the lease. A loss of $ 3,978 related to settlement of this indemnification provision was recognized in Transaction and integration costs in the consolidated statements of operations and comprehensive income (loss) in the second quarter of 2021. The Company’s results of operations for the year ended December 31, 2021 include GMLP’s result of operations from the date of acquisition, April 15, 2021, through December 31, 2021. Revenue and net income attributable to GMLP during this period was $ 191,437 and $ 111,679 , respectively. Acquisition costs associated with the Mergers of $ 33,907 for the year ended December 31, 2021 were included in Transaction and integration costs in the Company’s consolidated statements of operations and comprehensive income (loss). Unaudited pro forma financial information The following table summarizes the unaudited pro forma condensed financial information of the Company as if the Mergers had occurred on January 1, 2020. Year Ended December 31, 2021 2020 Revenue $ 1,429,361 $ 813,079 Net income (loss) 75,415 ( 339,909 ) Net income (loss) attributable to stockholders 62,059 ( 264,075 ) The unaudited pro forma financial information is based on historical results of operations as if the acquisitions had occurred on January 1, 2020, adjusted for transaction costs incurred, adjustments to depreciation expense associated with the recognition of the fair value of vessels acquired, additional amortization expense associated with the recognition of the fair value of favorable and unfavorable customer contracts for vessel charters, additional interest expense as a result of incurring new debt and extinguishing historical debt, elimination of a pre-existing lease relationship between the Company and GMLP, and a step-up of the equity method investments. Pro forma net income (loss) for the year ended December 31, 2020 includes non-recurring expenses associated with the Mergers of $ 37,885 ; such non-recurring expenses have been removed from the pro forma financial information for the year ended December 31, 2021. Transaction costs incurred and the elimination of a pre-existing lease relationship between the Company and GMLP are considered to be non-recurring. The unaudited pro forma financial information does not give effect to any synergies, operating efficiencies or cost savings that may result from the Mergers. F-22 Table of Contents GLNG management and services agreements In connection with the closing of the Mergers, the Company entered into multiple agreements with Golar Management Limited, a subsidiary of GLNG (“Golar Management”), including omnibus agreements, transition services agreements, ship management agreements and other services agreements described as follows: • The Company and Golar Management entered into transition service agreements whereby Golar Management provides certain administrative and consulting services to facilitate the integration of GMLP and Hygo (the “Transition Services Agreements”). The Transition Services Agreements commenced on April 15, 2021, and will terminate on April 30, 2022 unless terminated earlier by either party. The Company pays Golar Management monthly payments of $ 329 and will reimburse Golar Management for all reasonable and documented out-of-pocket expenses or remittances of funds paid to a third party in connection with the provision of the Transition Services. • The Company’s vessel-owning subsidiaries entered into ship management agreements with Golar Management (the “Ship Management Agreements”), pursuant to which Golar Management provides certain technical, crew, insurance and commercial management services for the acquired vessels for a specified annual cost per vessel. The Ship Management Agreements commenced on April 15, 2021, will continue until terminated by either party by notice, in which event the relevant Ship Management Agreements will terminate upon the later of 12 months after April 15, 2021 or two months from the date on which such notice is received. • The Company also entered into certain agreements to facilitate the integration of the acquired businesses and their operations whereby GLNG or its subsidiaries will continue to provide certain guarantees and indemnities under charter arrangements or GMLP’s and Hygo’s sale leaseback agreements. NFE pays the relevant Charter Guarantor or Golar an annual guarantee fee of $ 250 per vessel. • The Company and Golar Management (Bermuda) Limited (“Golar Bermuda”) entered into a services agreement (the “Bermuda Services Agreement”) pursuant to which Golar Bermuda will act as GMLP’s and Hygo’s registered office in Bermuda and provide certain corporate secretarial, registrar and administration services (the “Bermuda Services Agreements”). The Bermuda Services Agreements commenced on April 15, 2021. Either party may terminate the Bermuda Services Agreements upon 30 days’ prior written notice. The Company pays Golar Bermuda an aggregate annual fee of $ 300 for the Bermuda services and will reimburse Golar Bermuda for all incidental documented costs and expenses reasonably incurred by Golar Bermuda and its designees in connection with the provision of the Bermuda services. During the period subsequent to the completion of the Mergers, the Company incurred $ 10,881 for the year ended December 31, 2021 in management, services or guarantee fees under these agreements with GLNG, Golar Management or GLNG affiliated entities. Asset acquisitions On January 12, 2021, the Company acquired 100 % of the outstanding shares of CH4 Energia Ltda. (“CH4”), an entity that owns key permits and authorizations to develop an LNG terminal and an up to 1.37GW gas-fired power plant at the Port of Suape in Brazil. The purchase consideration consisted of $ 903 of cash paid at closing in addition to potential future payments contingent on achieving certain construction milestones of up to approximately $ 3,600 . As the contingent payments meet the definition of a derivative, the fair value of the contingent payments as of the acquisition date of $ 3,047 was included as part of the purchase consideration and was recognized in Other non-current liabilities on the consolidated balance sheets. The selling shareholders of CH4 may also receive future payments based on gas consumed by the power plant or sold to customers from the LNG terminal. For the year ended December 31, 2021, the Company recognized a gain from the change in fair value of the derivative liability of $ 31 , which is presented in Other (income) expense, net in the consolidated statements of operations and comprehensive income (loss). The purchase of CH4 has been accounted for as an asset acquisition. As a result, no goodwill was recorded, and the Company’s acquisition-related costs of $ 295 were included in the purchase consideration. The total purchase consideration of $ 5,776 , which includes a deferred tax liability of $ 1,531 recognized as a result from the acquisition, was allocated to permits and authorizations acquired and was recorded within Intangible assets, net. On March 11, 2021, the Company acquired 100 % of the outstanding shares of Pecém Energia S.A. (“Pecém”) and Energetica Camacari Muricy II S.A. (“Muricy”). These companies collectively hold grants to operate as an independent power provider and 15-year power purchase agreements for the development of thermoelectric power plants in the State of Bahia, Brazil. The Company is seeking to obtain the necessary approvals to transfer the power purchase agreements in connection with the construction the gas-fired power plant and LNG import terminal at the Port of Suape. F-23 Table of Contents The purchase consideration consisted of $ 8,041 of cash paid at closing in addition to potential future payments contingent on achieving commercial operations of the gas-fired power plant at the Port of Suape of up to approximately $ 10.5 million. As the contingent payments meet the definition of a derivative, the fair value of the contingent payments as of the acquisition date of $ 7,473 was included as part of the purchase consideration and was recognized in Other non-current liabilities on the consolidated balance sheets. The selling shareholders may also receive future payments based on power generated by the power plant in Suape, subject to a maximum payment of approximately $ 4.6 million. For the year ended December 31, 2021, the Company recognized a gain from the change in fair value of the derivative liability of $ 752 , which is presented in Other (income) expense, net in the consolidated statements of operations and comprehensive income (loss). The purchases of Pecém and Muricy were accounted for as asset acquisitions. As a result, no goodwill was recorded, and the Company’s acquisition-related costs of $ 1,275 were included in the purchase consideration. Of the total purchase consideration, $ 16,585 was allocated to acquired power purchase agreements and recorded in Intangible assets, net on the consolidated balance sheets; the remaining purchase consideration was related to working capital acquired. 5. VIEs Lessor VIEs The Company assumed sale leaseback arrangements for four vessels as part of the Mergers. The counterparty to each of these sale leaseback arrangements is a VIE, and these lessor VIEs are SPVs wholly owned by financial institutions. While the Company does not hold an equity investment in these entities, these lessor VIEs are consolidated in the consolidated financial statements, and all equity attributable to these lessor VIEs is included in non-controlling interest in the consolidated financial statements. Transactions between our wholly-owned subsidiaries and these VIEs are eliminated in consolidation, including sale leaseback transactions. CCB Financial Leasing Corporation Limited (“CCBFL”) In September 2018, the Nanook was sold to a subsidiary of CCBFL, Compass Shipping 23 Corporation Limited, and subsequently leased back on a bareboat charter for a term of twelve years . The Company has options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the third anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the twelve-year lease period. Oriental Shipping Company (“COSCO”) In December 2019, the Penguin was sold to a subsidiary of COSCO, Oriental Fleet LNG 02 Limited, and subsequently leased back on a bareboat charter for a term of six years . The Company has options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the first anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the six-year lease period. AVIC International Leasing Company Limited (“AVIC”) In March 2020, the Celsius was sold to a subsidiary of AVIC, Noble Celsius Shipping Limited, and subsequently leased back on a bareboat charter for a term of seven years . The Company has options to repurchase the vessel throughout the charter term at fixed predetermined amounts, commencing from the first anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the seven-year lease period. China Merchants Bank Lending (“CMBL”) In November 2015, the Eskimo was sold to a subsidiary of CMBL, Sea 23 Leasing Co. Limited (“Eskimo SPV”), and subsequently leased back under a bareboat charter for a term of ten years . The Company had options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the third anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten-year lease period. In November 2021, the Company exercised its option to repurchase the Eskimo for a total payment of $ 190,518 . After exercising the repurchase option, the Company no longer has a controlling financial interest in the Eskimo SPV, and therefore, upon closing of the repurchase option, the Company deconsolidated the Eskimo SPV from its financial results. The Company has recognized a loss of $ 10,975 from exiting this financing arrangement in loss on extinguishment of debt, net in the consolidated statements of operations and comprehensive income (loss). F-24 Table of Contents While the Company does not hold an equity investment in the above SPVs, the Company has a variable interest in these SPVs. The Company is the primary beneficiary of these VIEs and, accordingly, these VIEs are consolidated into the Company’s financial results for the period after the Mergers. The effect of the bareboat charter arrangements is eliminated upon consolidation of the SPVs. The equity attributable to CCBFL, COSCO, AVIC and prior to the repurchase, CMBL, in their respective VIEs is included in non-controlling interests in the consolidated financial statements. As of December 31, 2021, the Penguin and Celsius was recorded in Property, plant and equipment, net on the consolidated balance sheet, and the Nanook was recognized in Finance leases, net on the consolidated balance sheet. The following table gives a summary of the sale and leaseback arrangements, including repurchase options and obligations as of December 31, 2021: Vessel End of lease term Date of next repurchase option Repurchase price at next repurchase option date Repurchase obligation at end of lease term Nanook September 2030 March 2022 $ 199,099 $ 94,179 Penguin December 2025 December 2022 84,668 63,040 Celsius March 2027 March 2022 98,290 45,000 A summary of payment obligations under the bareboat charters with the lessor VIEs as of December 31, 2021, are shown below: Vessel 2022 2023 2024 2025 2026 2027 + Nanook $ 21,810 $ 21,197 $ 20,608 $ 19,971 $ 19,358 $ 67,153 Penguin 12,003 11,635 11,245 8,196 - - Celsius 15,847 15,265 14,695 14,102 12,868 - The payment obligation table above includes variable rental payments due under the lease based on an assumed LIBOR plus margin but excludes the repurchase obligation at the end of lease term. The assets and liabilities of these lessor VIEs that most significantly impact the consolidated balance sheet as of December 31, 2021 are as follows: Nanook Penguin Celsius Assets Restricted cash $ 4,772 $ 5,563 $ 25,316 Liabilities Long-term interest bearing debt - current portion $ - $ 18,798 $ 5,799 Long-term interest bearing debt - non-current portion 186,638 71,237 107,474 As a result of the Mergers, the most significant impact of the lessor VIEs operations on the Company’s consolidated statement of operations is an addition to interest expense of $ 11,766 for the year ended December 31, 2021. Upon assumption of the debt held by VIEs in conjunction with the Mergers, the Company recognized the liabilities assumed at fair value, and the amortization of the discount of $ 2,465 has been recognized as an addition to interest expense incurred of $ 9,301 for the year ended December 31, 2021. The most significant impact of the lessor VIEs cash flows on the consolidated statements of cash flows is net cash used in financing activities of $ 236,916 for the period subsequent to the completion of the Mergers. Other VIEs Hilli LLC The Company acquired an interest of 50 % of the common units of Hilli LLC (“Hilli Common Units”) as part of the acquisition of GMLP. Hilli LLC owns Golar Hilli Corporation (“Hilli Corp”), the disponent owner of the Hilli . The Company determined that Hilli LLC is a VIE, and the Company is not the primary beneficiary of Hilli LLC. Thus, Hilli LLC has not been consolidated into the financial statements and has been recognized as an equity method investment. F-25 Table of Contents As of December 31, 2021 the maximum exposure as a result of the Company’s ownership in the Hilli LLC is the carrying value of the equity method investment of $ 366,504 and the outstanding portion of the Hilli Leaseback (defined below) which have been guaranteed by the Company. PT Golar Indonesia (“PTGI”) The Company acquired all of the voting stock and controls all of the economic interests in PTGI pursuant to a shareholders’ agreement with the other shareholder of PTGI, PT Pesona Sentra Utama (“PT Pesona”), as part of the acquisition of GMLP. PT Pesona holds the remaining 51 % interest in the issued share capital of PTGI and provides agency and local representation services for the Company with respect to NR Satu. PTGI is the owner and operator of NR Satu . The Company determined that PTGI is a VIE, and the Company is the primary beneficiary of PTGI. Thus, PTGI has been consolidated into the financial statements. The following table summarizes the balance sheet of PTGI as of December 31, 2021: Assets December 31, 2021 Current assets Cash & cash equivalents $ 3,257 Receivables, net 2,610 Total current assets 5,867 Property, plant and equipment, net 178,440 Intangible assets, net 15,595 Other non-current assets, net 2,642 Total assets $ 202,544 Liabilities Accounts payable $ 16,219 Accrued liabilities 907 Other current liabilities 3,664 Total current liabilities 20,790 Deferred tax liabilities, net 2,711 Total liabilities 23,501 Total stockholder’s equity 179,043 Total liabilities and stockholder’s equity $ 202,544 Trade creditors of PTGI have no recourse to our general credit. PTGI paid no dividends to PT Persona during the period after the Mergers. 6 . Revenue recognition Operating revenue 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, and the sale of LNG cargos. Included in operating revenue is revenue from cargo sales of $ 462,695 for the year ended December 31, 2021; there were no comparable transactions for the year ended December 31, 2020. Other revenue includes revenue for development services as well as interest income from the Company’s finance leases and other revenue. The table below summarizes the balances in Other revenue : Year Ended December 31, 2021 2020 2019 Development services revenue $ 125,924 $ 129,753 $ 27,308 Interest income and other revenue 35,261 3,586 16,317 Total other revenue $ 161,185 $ 133,339 $ 43,625 Development services revenue recognized in the years ended December 31, 2021, 2020 and 2019 included $ 114,654 , $ 118,757 and $ 0 , respectively, for the customer’s use of natural gas as part of commissioning their assets. Under most customer contracts, invoicing occurs once the Company’s performance obligations have been satisfied, at which point payment is unconditional. As of December 31, 2021 and 2020 , receivables related to revenue from contracts with customers totaled $ 192,533 and $ 76,431 , respectively, and were included in Receivables, net on the consolidated balance sheets, net of current expected credit losses of $ 164 and $ 98 , respectively. Other items included in Receivables, net not related to revenue from contracts with customers represent leases which are accounted for outside the scope of ASC 606, Revenue from Contracts with Customers, and receivables associated with reimbursable costs. F-26 Table of Contents 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, 2021 and 2020 are detailed below: December 31, 2021 December 31, 2020 Contract assets, net - current $ 7,462 $ 4,029 Contract assets, net - non-current 36,757 30,434 Total contract assets, net $ 44,219 $ 34,463 Contract liabilities $ 2,951 $ 8,399 Revenue recognized in the year from: Amounts included in contract liabilities at the beginning of the year $ 8,028 $ 6,542 Contract assets are presented net of expected credit losses of $ 442 and $ 376 as of December 31, 2021 and 2020 , respectively. As of December 31, 2021 and 2020, contract assets was comprised of $ 43,839 and $ 6,821 of unbilled receivables, respectively, that represent unconditional rights to payment only subject to the passage of time. 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, 2021, the Company has capitalized $ 10,981 , of which $ 604 of these costs is presented within Other current assets and $ 10,377 is presented within Other non-current assets on the consolidated balance sheets. As of December 31, 2020, the Company had capitalized $ 11,276 , of which $ 588 of these costs was presented within Other current assets and $ 10,688 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. 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 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 represents 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 : Period Revenue 2022 $ 480,052 2023 520,335 2024 516,660 2025 507,868 2026 505,729 Thereafter 7,997,353 Total $ 10,527,997 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 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. F-27 Table of Contents Lessor arrangements The Company’s vessel charters of LNG carriers and FSRUs can take the form of operating or finance leases. Property, plant and equipment subject to vessel charters accounted for as operating leases is included within Vessels within Note 14. Property, plant and equipment, net. The following is the carrying amount of property, plant and equipment that is leased to customers under operating leases: December 31, 2021 December 31, 2020 Property, plant and equipment $ 1,274,234 $ 18,394 Accumulated depreciation ( 31,849 ) ( 932 ) Property, plant and equipment, net $ 1,242,385 $ 17,462 The components of lease income from vessel operating leases for the year ended December 31, 2021 were as follows: Year Ended December 31, 2021 Operating lease income $ 214,193 Variable lease income 11,067 Total operating lease income $ 225,260 The Company’s charter of the Nanook to CELSE and certain equipment leases provided in connection with the supply of natural gas or LNG are accounted for as finance leases. After the completion of the Mergers, the Company recognized interest income of $ 32,880 for the year ended December 31, 2021 related to the finance lease of the Nanook , which is included within Other revenue in the consolidated statements of operations and comprehensive income (loss). The Company recognized revenue of $ 5,549 for the year ended December 31, 2021 related to the operation and services agreement within Vessel charter revenue in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2021, there were outstanding balances due from CELSE of $ 6,428 , of which $ 4,371 is recognized in Receivables, net and a loan to CELSE of $ 2,057 is recognized in Prepaid expenses and other current assets, net on the consolidated balance sheets. CELSE is an affiliate due to the equity method investment held in CELSE’s parent, CELSEPAR, and as such, these transactions and balances are related party in nature. The following table shows the expected future lease payments as of December 31, 2021, for 2022 through 2026 and thereafter: Future cash receipts Financing Leases Operating Leases 2022 $ 49,951 $ 261,108 2023 50,616 144,744 2024 51,442 103,418 2025 51,876 26,022 2026 52,147 - Thereafter 1,051,956 - Total minimum lease receivable $ 1,307,988 $ 535,292 Unguaranteed residual value 107,000 Gross investment in sales-type lease $ 1,414,988 Less: Unearned interest income 807,057 Less: Current expected credit losses 1,552 Net investment in leased vessel $ 606,379 Current portion of net investment in leased asset $ 3,704 Non-current portion of net investment in leased asset 602,675 F-28 Table of Contents 7. Leases, as lessee 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. As of December 31, 2021 and 2020, right-of-use assets, current lease liabilities and non-current lease liabilities consisted of the following: December 31, 2021 December 31, 2020 Operating right-of-use assets $ 285,751 $ 141,347 Finance right-of-use assets (1) 23,912 - Total right-of-use assets $ 309,663 $ 141,347 Current lease liabilities: Operating lease liabilities $ 43,395 $ 35,481 Finance lease liabilities 3,719 - Total current lease liabilities $ 47,114 $ 35,481 Non-current lease liabilities: Operating lease liabilities $ 219,189 $ 84,323 Finance lease liabilities 14,871 - Total non-current lease liabilities $ 234,060 $ 84,323 (1) Finance lease right-of-use assets are recorded net of accumulated amortization of $ 622 as of December 31, 2021. For the years ended December 31, 2021 and 2020, the Company’s operating lease cost recorded within the consolidated statements of operations and comprehensive income (loss) were as follows: Year Ended December 31, 2021 2020 Fixed lease cost $ 41,054 $ 39,841 Variable lease cost 1,711 2,013 Short-term lease cost 6,974 1,454 Lease cost - Cost of sales $ 41,147 $ 36,283 Lease cost - Operations and maintenance 2,343 2,501 Lease cost - Selling, general and administrative 6,249 4,524 For the years ended December 31, 2021 and 2020, the Company has capitalized $ 15,568 and $ 10,457 of lease costs, respectively, 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. During the year ended December 31, 2019, the Company recognized rental expense for all operating leases of $ 37,069 related primarily to LNG vessel time charters, office space, a land site lease and marine port berth leases. Beginning in the second quarter of 2021, leases for ISO tanks and a parcel of land that transfer the ownership in underlying assets to the Company at the end of the lease have commenced, and these leases are treated as finance leases. For the year ended December 31, 2021, the Company recognized interest expense related to finance leases of $ 409 , which is included within Interest expense, net in the consolidated statements of operations and comprehensive income (loss). For the year ended December 31, 2021, the Company recognized amortization of the right-of-use asset related to finance leases of $ 622 , which is included within Depreciation and amortization in the consolidated statements of operations and comprehensive income (loss). F-29 Table of Contents 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 years ended December 30, 2021 and 2020: Year Ended December 31, 2021 2020 Operating cash outflows for operating lease liabilities $ 46,066 $ 45,934 Financing cash outflows for finance lease liabilities 2,156 - Right-of-use assets obtained in exchange for new operating lease liabilities 172,996 182,799 Right-of-use assets obtained in exchange for new finance lease liabilities 24,533 - The future payments due under operating and finance leases as of December 31, 2021 are as follows: Operating Leases Financing Leases 2022 $ 62,616 $ 4,515 2023 49,481 4,362 2024 43,071 4,381 2025 34,677 4,381 2026 26,710 2,625 Thereafter 182,480 1,030 Total Lease Payments $ 399,035 $ 21,294 Less: effects of discounting 136,451 2,704 Present value of lease liabilities $ 262,584 $ 18,590 Current lease liability $ 43,395 $ 3,719 Non-current lease liability 219,189 14,871 As of December 31, 2021, the weighted-average remaining lease term for operating leases was 9.3 years and finance leases was 5.1 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, 2021 and 2020 was 8.7 % and 8.3 %, respectively. The weighted average discount rate associated with finance leases as of December 31, 2021 is 5.1 %. The Company has executed a lease for an LNG carrier that has not commenced as of December 31, 2021 with noncancelable terms of 7 years and including fixed payments of approximately $ 198.1 million. 8. Financial instruments Interest rate and currency risk management In connection with the Mergers, the Company has acquired financial instruments that GMLP and Hygo used to reduce the risk associated with fluctuations in interest rates and foreign exchange rates. Interest rate swaps are used to convert floating rate interest obligations to fixed rates, which from an economic perspective hedges the interest rate exposure. The Company also acquired a cross currency interest rate swap to manage interest rate exposure on the Debenture Loan and the foreign exchange rate exposure on the US dollar cash flows from the charter of the Nanook to CELSE that support repayment of the Brazilian Real-denominated Debenture Loan. The Company does not hold or issue instruments for speculative or trading purposes, and the counterparties to such contracts are major banking and financial institutions. Credit risk exists to the extent that the counterparties are unable to perform under the contracts; however, the Company does not anticipate non-performance by any counterparties. The following table summarizes the terms of interest rate and cross currency interest rate swaps as of December 31, 2021: Instrument Notional Amount (in thousands) Maturity Dates Fixed Interest Rate Forward Foreign Exchange Rate Interest rate swap: Receiving floating, pay fixed $ 356,250 March 2026 2.86 % N/A Cross currency interest rate swap - Debenture Loan BRL 230,100 September 2024 5.90 % 5.424 The mark-to-market gain or loss on our interest rate and foreign currency swaps that are not designated as hedges for accounting purposes for the period are reported in the consolidated statements of operations and comprehensive income (loss) in Other (income) expense, net . F-30 Table of Contents Fair value 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. These inputs are prioritized as follows: • Level 1 – observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2 – inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs. • Level 3 – unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants price the asset or liability. The valuation techniques that may be used to measure fair value are as follows: • Market approach – uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. • Income approach – uses valuation techniques, such as the discounted cash flow technique, to convert future amounts to a single present amount based on current market expectations about those future amounts. • Cost approach – based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). The following table presents the Company’s financial assets and financial liabilities, including those that are measured at fair value, as of December 31, 2021 and 2020: Fair Value December 31, 2021 December 31, 2021 December 31, 2020 December 31, 2020 Valuation Hierarchy Carrying Value Fair Value Carrying Value Fair Value Technique Non-Derivatives: Cash and cash equivalents Level 1 $ 187,509 $ 187,509 $ 601,522 $ 601,522 Market approach Restricted cash Level 1 76,521 76,521 27,814 27,814 Market approach Investment in equity securities Level 1 11,195 11,195 256 256 Market approach Investment in equity securities Level 3 7,678 7,678 1,000 1,000 Market approach Long-term debt (1) Level 2 3,895,255 3,910,425 1,250,000 1,327,488 Market approach Derivatives: Derivative liability (2) (3) Level 3 $ 30,686 $ 30,686 $ 10,716 $ 10,716 Income approach Equity agreement (3) (4) Level 3 18,163 18,163 22,768 22,768 Income approach Interest rate swap liability (5) (6) Level 2 21,929 21,929 - - Income approach (1) Long-term debt is recorded at amortized cost on the consolidated balance sheets, and is presented in the above table on a gross basis and not reflective of the deferred financing costs of $ 40,125 and $ 10,439 as of December 31, 2021 and December 31, 2020, respectively. (2) Consideration due to the sellers in assets acquistions when certain contingent events occur. The liability associated with the derivative liabilities is recorded within Other current liabilities and Other long-term liabilities on the consolidated balance sheets. (3) The Company estimates fair value of the derivative liability and equity agreement using a discounted cash flows method with discount rates based on with similar credit ratings and matching terms to the discount periods as well as a probability of the contingent event occurring. (4) To be paid at the earlier of agreed-upon date or the date on which the valid planning permission is received for the facility in development in Shannon, Ireland. The liability associated with the equity agreement is recorded within Other current liabilities on the consolidated balance sheets. (5) Interest rate swap liability and cross currency interest rate swap liability is presented within Other current liabilities on the consolidated balance sheet s. (6) The fair value of certain derivative instruments, including interest rate swaps, is estimated considering current interest rates, foreign exchange rates, closing quoted market prices and the creditworthiness of counterparties. The Company believes the carrying amounts of cash and cash equivalents, accounts receivable, finance lease receivables and accounts payable approximated their fair value as of December 31, 2021 and 2020 and are classified as Level 1 within the fair value hierarchy. As part of the Hygo Merger, the Company assumed liabilities of $ 8,608 for payments due to sellers in asset acquisitions completed prior to the Hygo Merger, and these liabilities are reflected as derivative liabilities. Activity during the year ended December 31, 2021 also included the recognition of additional derivative liabilities from transactions accounted for as asset acquisitions of $ 10,520 (Note 4). During the years December 31, 2021 and 2020, the Company had no settlements of the equity agreement or derivative liabilities or any transfers in or out of Level 3 in the fair value hierarchy. F-31 Table of Contents The table below summarizes the fair value adjustment to instruments measured at Level 3 in the fair value hierarchy, the derivative liability and equity agreement, as well as the cross currency interest rate swap and the interest rate swap. These adjustments have been recorded within Other (income) expense, net in the consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2021, 2020 and 2019 : Year Ended December 31, 2021 2020 2019 Investment in equity securities - Fair value adjustment - (Gain) loss $ ( 4,315 ) $ - $ - Derivative Liability/Equity Agreement - Fair value adjustment - (Gain) loss ( 341 ) 4,408 121 Interest rate swap - Fair value adjustment - (Gain) loss ( 3,926 ) - - Cross currency interest rate swap - Fair value adjustment - (Gain) loss ( 1,636 ) - - Under the Company’s interest rate swap, the Company is required to provide cash collateral, and as of December 31, 2021, $ 12,500 of cash collateral is presented as restricted cash on the consolidated balance sheets . 9 . Restricted cash As of December 31, 2021 and 2020, restricted cash consisted of the following: December 31, 2021 December 31, 2020 Cash held by lessor VIEs $ 35,651 $ - Collateral for letters of credit and performance bonds 27,614 900 Collateral for interest rate swaps 12,500 - Collateral for performance under customer agreements - 15,000 Collateral for LNG purchases - 11,664 Other restricted cash 756 250 Total restricted cash $ 76,521 $ 27,814 Current restricted cash $ 68,561 $ 12,814 Non-current restricted cash 7,960 15,000 Restricted cash does not include minimum consolidated cash balances of $ 30,000 required to be maintained as part of the financial covenants for sale and leaseback financings and the Vessel Term Loan Facility that is included in Cash and cash equivalents on the consolidated balance sheets as of December 31, 2021. 10 . Inventory As of December 31, 2021 and 2020, inventory consisted of the following: December 31, 2021 December 31, 2020 LNG and natural gas inventory $ 16,815 $ 13,986 Automotive diesel oil inventory 4,789 3,986 Bunker fuel, materials, supplies and other 15,578 4,888 Total inventory $ 37,182 $ 22,860 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 income (loss). No adjustments were recorded during the years ended December 31, 2021 and 2020. The Company recorded an adjustment to the value of inventory of $ 251 during the year ended December 31, 2019. 11. Prepaid expenses and other current assets As of December 31, 2021 and 2020, prepaid expenses and other current assets consisted of the following: December 31, 2021 December 30, 2020 Prepaid expenses 19,951 16,928 Recoverable taxes 31,788 7,335 Due from affiliates 3,299 1,881 Other current assets 28,077 22,126 Total prepaid expenses and other current assets, net $ 83,115 $ 48,270 Other current assets as of December 31, 2021 and 2020 primarily consists of receivables for recoverable taxes and deposits. F-32 Table of Contents 12. Equity method investments As a result of the Mergers, the Company acquired investments in Centrais Elétricas de Sergipe Participações S.A. (“CELSEPAR”) and Hilli LLC, both of which have been recognized as equity method investments. The Company has a 50 % ownership interest in both entities. The investments are reflected in the Terminals and Infrastructure and Ships segments, respectively. Changes in the balance of the Company’s equity method investments is as follows: December 31, 2021 Equity method investments as of December 31, 2020 $ - Acquisition of equity method investments in the Mergers 1,179,021 Dividends ( 21,364 ) Equity in earnings / losses of investees 14,443 Foreign currency translation adjustment 9,913 Equity method investments as of December 31, 2021 $ 1,182,013 The carrying amount of equity method investments as of December 31, 2021 is as follows: December 31, 2021 Hilli LLC $ 366,504 CELSEPAR 815,509 Total $ 1,182,013 As of December 31, 2021, the carrying value of the Company’s equity method investments exceeded its proportionate share of the underlying net assets of its investees by $ 792,995 . In conjunction with the provisional amounts recognized for the Mergers, the basis difference of $ 750,824 was allocated to tangible assets, identifiable intangible assets, liabilities and goodwill, and the basis difference attributable to amortizable net assets is amortized to Income from equity method investments over the remaining estimated useful lives of the underlying assets. CELSEPAR CELSEPAR is jointly owned and operated with Ebrasil Energia Ltda. (“Ebrasil”), an affiliate of Eletricidade do Brasil S.A., and the Company accounts for this 50 % investment using the equity method. CELSEPAR owns 100 % of the share capital of Centrais Elétricas de Sergipe S.A. (“CELSE”), the owner and operator of the Sergipe Power Plant. The following table summarizes the financial information of CELSEPAR shown on a 100 % basis as of December 31, 2021 and the period subsequent to the Mergers: December 31, 2021 Balance sheet Current assets $ 314,811 Non-current assets 1,651,569 Current liabilities 366,530 Non-current liabilities 1,422,147 Statement of operations Revenues $ 596,852 Net loss ( 9,911 ) F-33 Table of Contents Hilli LLC The Company acquired an interest of 50 % of the Hilli Common Units as part of the acquisition of GMLP. The ownership interests in Hilli LLC are represented by three classes of units, Hilli Common Units, Series A Special Units and Series B Special Units. The Company did not acquire any of the Series A Special Units or Series B Special Units. The Hilli Common Units provide the Company with significant influence over Hilli LLC. The Hilli is currently operating under an 8 -year liquefaction tolling agreement (“LTA”) with Perenco Cameroon S.A. and Société Nationale des Hydrocarbures. Within 60 days after the end of each quarter, GLNG, the managing member of Hilli LLC, shall determine the amount of Hilli LLC’s available cash and appropriate reserves, and Hilli LLC shall make a distribution to the unitholders of Hilli LLC (“Hilli Unitholders”) of the available cash, subject to such reserves. Hilli LLC shall make distributions to the Hilli Unitholders when, as and if declared by GLNG; provided, however, that no distributions may be made on the Hilli Common Units on any distribution date unless Series A Distributions and Series B Distributions for the most recently ended quarter and any accumulated Series A Distributions and Series B Distributions in arrears for any past quarter have been or contemporaneously are being paid or provided for. Series A Distributions are calculated based on cash received by Hilli Corp for any tolling fees under the LTA relating to an increase in the Brent Crude price above $ 60 per barrel, adjusted by incremental taxes and costs that arise from underperformance of the Hilli. Series B Distributions are calculated as 95 % of “Revenues Less Expenses”, which is based on the cash receipts as a direct result of the employment of more than the first 50 % of LNG production capacity for the Hilli, adjusted for incremental operating expenses, capital costs, financing and tax costs associated with making more than 50 % capacity available and costs that arise from underperformance. The Hilli Common Units may receive 5 % of Revenues less Expenses received by Hilli Corp during such quarter. The Company is required to reimburse other investors in Hilli LLC for 50 % of the amount, if any, by which certain operating expenses and withholding taxes of Hilli LLC are below an annual threshold for up to $ 20,000 in the aggregate through 2026. Other investors are required to reimburse the Company for 50 % of the amount, if any, by which certain operating expenses and withholding taxes are above an annual threshold for up to $ 20,000 in the aggregate through 2026. Operating expense reimbursements did not materially impact the results of operations for the period after the GMLP Merger. Hilli Corp is a party to a Memorandum of Agreement, dated September 9, 2015, with Fortune Lianjiang Shipping S.A., a subsidiary of China State Shipbuilding Corporation (“Fortune”), pursuant to which Hilli Corp has sold to and leased back from Fortune the Hilli under a 10 -year bareboat charter agreement (the “Hilli Leaseback”). The Hilli Leaseback provided for postconstruction financing for the Hilli in the amount of $ 960 million. Under the Hilli Leaseback, Hilli Corp will pay to Fortune forty consecutive equal quarterly repayments of 1.375 % of the construction cost, plus interest based on LIBOR plus a margin of 4.15 %. The following table summarizes the financial information of Hilli LLC shown on a 100 % basis as of December 31, 2021 and the period subsequent to the Mergers: December 31, 2021 Balance sheet Current assets $ 68,435 Non-current assets 1,359,795 Current liabilities 61,595 Non-current liabilities 766,302 Statement of operations Revenues $ 157,550 Net income 310,006 During the period subsequent to the completion of the Mergers, net income for the year ended December 31, 2021 significantly exceeded total revenues for Hilli LLC as a result of the unrealized mark-to market movement in the oil derivative asset associated to the fair value of the Brent Crude price. The unrealized mark-to market movement in the oil derivative asset is allocated to the Series A Special unitholders only; as the Company does not own any of the Series A Special Units, gains and losses from income attributable to these units are not reflected in the Company’s income from equity method investments. F-34 Table of Contents 13. Construction in progress The Company’s construction in progress activity during the years ended December 31, 2021 and 2020 is detailed below: December 31, 2021 December 31, 2020 Balance at beginning of period $ 234,037 $ 466,587 Acquisition of construction in progress from business combinations 128,625 - Additions 790,395 118,530 Impact of change in FX rates ( 6,428 ) - Transferred to property, plant and equipment, net or finance leases ( 102,746 ) ( 351,080 ) Balance at end of period $ 1,043,883 $ 234,037 Interest expense of $ 30,093 , $ 25,924 and $ 25,172 , inclusive of amortized debt issuance costs, was capitalized for the years ended December 31, 2021, 2020 and 2019, respectively . The Company’s development activities are primarily in Latin America as of December 31, 2021, and the completion of such development is subject to risks related to successful completion, including those related to government approvals, site identification, financing, construction permitting and contract compliance. 14. Property, plant and equipment, net As of December 31, 2021 and 2020 , the Company’s property, plant and equipment, net consisted of the following: December 31, 2021 December 31, 2020 Vessels $ 1,461,211 $ - Terminal and power plant equipment 206,889 188,855 CHP facilities 122,777 119,723 Gas terminals 167,614 120,810 ISO containers and other equipment 134,775 100,137 LNG liquefaction facilities 63,213 63,213 Gas pipelines 58,987 58,974 Land 55,008 16,246 Leasehold improvements 9,377 8,723 Accumulated depreciation ( 141,915 ) ( 62,475 ) Total property, plant and equipment, net $ 2,137,936 $ 614,206 Depreciation for the years ended December 31, 2021, 2020 and 2019 totaled $ 80,220 , $ 32,116 and $ 7,527 , respectively, of which $ 1,167 , $ 927 and $ 701 , r espectively, is included within Cost of sales in the consolidated statements of operations and comprehensive income (loss). Capitalized drydocking costs of $ 8,087 are included in the vessel cost for December 31, 2021 which are depreciated from the completion of drydocking until the next expected dry docking. 15. Goodwill and intangible assets Goodwill The following table summarizes the changes in the carrying amount of goodwill as of December 31, 2021 and 2020: Terminals and Infrastructure Balance at December 31, 2020 $ - Acquired in the Mergers 760,135 Balance at December 31, 2021 $ 760,135 F-35 Table of Contents The Company performed its annual goodwill impairment test as of October 1, 2021 and conducted a qualitative assessment. The Company concluded that it was not more likely than not that the fair value of each reporting unit was less than the carrying amount, and no goodwill impairment charges were recognized during the year ended December 31, 2021. Intangible assets The following tables summarize the composition of intangible assets as of December 31, 2021 and 2020: December 31, 2021 Gross Carrying Amount Accumulated Amortization Currency Translation Adjustment Net Carrying Amount Weighted Average Life Definite-lived intangible assets Favorable vessel charter contracts $ 106,500 $ ( 27,074 ) $ - $ 79,426 3 Permits and development rights 48,217 ( 3,311 ) ( 119 ) 44,787 38 Acquired power purchase agreements 16,585 ( 750 ) 406 16,241 17 Easements 1,556 ( 243 ) - 1,313 30 Indefinite-lived intangible assets Easements 1,191 - ( 14 ) 1,177 n/a Total intangible assets $ 174,049 $ ( 31,378 ) $ 273 $ 142,944 December 31, 2020 Gross Carrying Amount Accumulated Amortization Currency Translation Adjustment Net Carrying Amount Weighted Average Life Definite-lived intangible assets Permits $ 42,441 $ ( 2,438 ) $ 3,456 $ 43,459 40 Easements 1,559 ( 190 ) - 1,369 30 Indefinite-lived intangible assets Easements 1,191 - 83 1,274 n/a Total intangible assets $ 45,191 $ ( 2,628 ) $ 3,539 $ 46,102 In conjunction with the Mergers, the Company acquired charter contracts with contractual rates that were favorable as compared to market rates and on the date of acquisition recognized intangible assets of $ 106,500 . During the first quarter of 2021, the Company recognized additions to permits of $ 5,776 acquired in a transaction accounted for as asset acquisition related to licenses and rights to develop a gas-fired power plant and associated infrastructure in the Port of Suape in Brazil. The Company also acquired rights operated a power generation facility and sell power in Brazil of $ 16,585 (see Note 4. Acquisitions). As of December 31, 2021 and 2020, the weighted-average remaining amortization periods for the intangible assets were 14.7 years and 37.5 years, respectively. Amortization expense for the year ended December 31, 2021 totaled $ 18,609 , which is inclusive of reductions in expense for the amortization of unfavorable contract liabilities assumed in the Mergers. Amortization expense for the years ended December 31, 2020 and 2019 totaled $ 1,120 and $ 1,114 , respectively. The estimated aggregate amortization expense, inclusive of reductions in expense for the amortization of unfavorable contract liabilities assumed in the Mergers, for each of the next five years is: Year ended December 31: 2022 $ 37,434 2023 25,979 2024 17,409 2025 4,591 2026 2,335 Thereafter 51,086 Total $ 138,834 F-36 Table of Contents 16. Other non-current assets As of December 31, 2021 and 2020, Other non-current assets consisted of the following: December 31, 2021 December 31, 2020 Deposits $ 2,400 $ 28,509 Contract asset, net (Note 6) 36,757 30,434 Investments in equity securities 18,873 1,256 Cost to fulfill (Note 6) 10,377 10,688 Upfront payments to customers 9,748 6,330 Other 20,263 8,813 Total other non-current assets $ 98,418 $ 86,030 F-37 Table of Contents Deposits as of December 31, 2020 are primarily related to deposits for land purchases in Ireland that we completed in 2021. 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. The Company recognized unrealized gains (losses) on its investments in equity securities of $ 8,254 , $( 2,284 ) and $( 1,116 ) for the year ended December 31, 2021, 2020 and 2019, respectively within Other (income), net in the consolidated statements of operations and comprehensive income (loss) . Other includes upfront payments to our service providers and financing costs associated with the Revolving Facility . 17. Accrued liabilities As of December 31, 2021 and 2020, accrued liabilities consisted of the following: December 31, 2021 December 31, 2020 Accrued development costs $ 101,177 $ 16,631 Accrued interest 61,630 27,938 Accrued bonuses 27,591 17,344 Accrued vessel operating and drydocking expenses 12,767 - Accrued consideration in asset acquisition 9,330 - Other accrued expenses 31,530 28,439 Total accrued liabilities $ 244,025 $ 90,352 18 . Other current liabilities As of December 31, 2021 and 2020, other current liabilities consisted of the following: December 31, 2021 December 31, 2020 Deferred revenue $ 28,662 $ 7,120 Interest rate swaps (Note 8) 21,929 - Equity agreement (Note 8) 18,163 22,768 Income tax payable 8,881 2,046 Due to affiliates 9,088 8,980 Other current liabilities 19,313 3,072 Total other current liabilities $ 106,036 $ 43,986 Deferred revenue includes contract liabilities and prepayments received from lessees under charter agreements. Other primarily consists of the value of unfavorable contracts assumed in the Mergers. F-38 Table of Contents 19. Debt As of December 31, 2021 and 2020, debt consisted of the following: Decemb er 31, 2021 December 31, 2020 Senior Secured Notes, due September 2025 $ 1,241,196 $ 1,239,561 Senior Secured Notes, due September 2026 1,477,512 - Vessel Term Loan Facility, due September 2024 408,991 - Debenture Loan, due September 2024 40,665 - CHP Facility 96,820 - Revolving Facility 200,000 - Subtotal (excluding lessor VIE loans) 3,465,184 1,239,561 CCBFL VIE loan : Golar Nanook SPV facility, due September 2030 186,638 - COSCO VIE loan : Golar Penguin SPV facility, due December 2025 90,035 - AVIC VIE loan : Golar Celsius SPV facility, due September 2023 / May 2027 113,273 - Total debt $ 3,855,130 $ 1,239,561 Current portion of long-term debt $ 97,251 $ - Long-term debt 3,757,879 1,239,561 Our outstanding debt as of December 31, 2021 is repayable as follows: Decem ber 31, 2021 2022 $ 87,849 2023 133,052 2024 323,097 2025 1,318,381 2026 1,709,874 Thereafter 323,902 Total debt $ 3,896,155 Less: fair value adjustments to assumed debt obligations ( 900 ) Less: deferred finance charges ( 40,125 ) Total debt, net deferred finance charges $ 3,855,130 2025 Notes In September 2020, the Company issued $ 1,000,000 of 6.75 % senior secured notes in a private offering pursuant to Rule 144A under the Securities Act (the “2025 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 2025 Notes, in whole or in part, at any time prior to maturity, subject to certain make-whole premiums. The 2025 Notes are guaranteed, jointly and severally, by certain of the Company’s subsidiaries, in addition to other collateral. The 2025 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 2025 Notes also provide for customary events of default and prepayment provisions. The Company used a portion of the net cash proceeds received from the 2025 Notes, together with cash on hand, to repay in full the outstanding principal and interest under previously existing credit agreements and secured and unsecured bonds, including related premiums, costs and expenses. In connection with the issuance of the 2025 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 2025 Notes on the consolidated balance sheets; unamortized deferred financing costs related to lenders in the previous credit agreement that participated in the 2025 Notes were $ 6,501 and such unamortized costs were also included as a reduction of the principal balance of the 2025 Notes and will be amortized over the remaining term of the 2025 Notes. As a portion of the repayment of the previous credit agreement was a modification, in the third quarter of 2020, the Company recognized $ 4,028 of third-party fees as an expense in the consolidated statements of operations and comprehensive loss. F-39 Table of Contents In December 2020, the Company issued $ 250,000 of additional notes on the same terms as the 2025 Notes in a private offering pursuant to Rule 144A under the Securities Act (subsequent to this issuance, these additional notes are included in the definition of 2025 Notes herein). Proceeds received included a premium of $ 13,125 , which was offset by additional financing costs incurred of $ 4,566 . As of December 31, 2021 and 2020, remaining unamortized deferred financing costs for the 2025 Notes were $ 8,804 and $ 10,439 , respectively. 2026 Notes In April 2021, the Company issued $ 1,500,000 of 6.50 % senior secured notes in a private offering pursuant to Rule 144A under the Securities Act (the “2026 Notes”) at an issue price equal to 100 % of principal. Interest is payable semi-annually in arrears on March 31 and September 30 of each year, commencing on September 30, 2021; no principal payments are due until maturity on September 30, 2026 . The Company may redeem the 2026 Notes, in whole or in part, at any time prior to maturity, subject to certain make-whole premiums. The 2026 Notes are guaranteed on a senior secured basis by each domestic subsidiary and foreign subsidiary that is a guarantor under the existing 2025 Notes, and the 2026 Notes are secured by substantially the same collateral as the Company’s existing first lien obligations under the 2025 Notes. The Company used the net proceeds from this offering to fund the cash consideration for the Mergers and pay related fees and expenses. In connection with the issuance of the 2026 Notes, the Company incurred $ 25,217 in origination, structuring and other fees, which was deferred as a reduction of the principal balance of the 2026 Notes on the consolidated balance sheets. As of December 31, 2021, total remaining unamortized deferred financing costs for the 2026 Notes was $ 22,488 . Vessel Term Loan Facility In September 2021, Golar Partners Operating LLC, an indirect subsidiary of NFE, closed a senior secured amortizing term loan facility (the “Vessel Term Loan Facility”). Under this facility, the Company borrowed an initial amount of $ 430,000 , which may be increased to $ 725,000 , subject to satisfaction of certain conditions including the provision of security in relation to additional vessels. Loans under the Vessel Term Loan Facility bear interest at a rate of LIBOR plus a margin of 3 percent. The Vessel Term Loan Facility shall be repaid in quarterly installments of $ 15,357 , with the final repayment date in September 2024. Quarterly principal payments will be increased to reflect any upsize of the Vessel Term Loan Facility to reflect a straight-line amortization profile over the remaining term. Obligations under the Vessel Term Loan Facility are guaranteed by GMLP and certain of GMLP’s subsidiaries. Lenders have been granted a security interest covering three floating storage and regasification vessels and four liquified natural gas carriers, and the issued and outstanding shares of capital stock of certain GMLP subsidiaries have been pledged as security. As of December 31, 2021, the aggregate net book value of the three floating storage and regasification vessels and four liquified natural gas carriers pledged as security was approximately $ 660,567 . The Company may prepay outstanding indebtedness without penalty, and certain events, such as (i) total loss; (ii) minimum security value; (iii) the sale or transfer of certain vessels; or (iv) the termination of the charter over the Hilli, will require a mandatory prepayment. The Vessel Term Loan Facility contains customary representations and warranties and customary affirmative and negative covenants, including financial covenants, chartering restrictions, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. Financial covenants include requirements that GMLP and Golar Partners Operating LLC maintain a certain amount of Free Liquid Assets, that the EBITDA to Consolidated Debt Service and the Net Debt to EBITDA ratios are no less than 1.15 :1 and no greater than 6.50 :1, respectively, and that Consolidated Net Worth is greater than $ 250,000 , each as defined in the Vessel Term Loan Facility. The Company was in compliance with these covenants as of December 31, 2021. In connection with the closing the Vessel Term Loan Facility, the Company incurred $ 6,324 in origination, structuring and other fees, which was deferred as a reduction of the principal balance of the Vessel Term Loan Facility on the consolidated balance sheets. As of December 31, 2021, total remaining unamortized deferred financing costs for the Vessel Term Loan Facility was $ 5,652 . F-40 Table of Contents Debenture Loan As part of the Hygo Merger, the Company assumed non-convertible Brazilian debentures issued by NFE Brasil, an indirect subsidiary of Hygo, in the aggregate principal amount of BRL 255.6 million ($ 45.0 million) due September 2024 , bearing interest at a rate equal to the one-day interbank deposit futures rate in Brazil plus 2.65 % (the “Debenture Loan”). The Debenture Loan was recognized at fair value of $ 44,566 on the date of the Hygo Merger, and the discount recognized in purchase accounting will result in additional interest expense until maturity. Interest and principal is payable on the Debenture Loan semi-annually on September 13 and March 13. The Debenture Loan is fully and unconditionally guaranteed by 100 % of the shares issued by NFE Brasil owned by the Company’s consolidated subsidiary, LNG Power Ltd. CHP Facility In August 2021, NFE South Power Holdings Limited (“South Power”), a wholly owned subsidiary of NFE, entered into a financing agreement (“CHP Facility”), initially receiving approximately $ 100,000 . The CHP Facility was secured by a mortgage over the lease of the site on which the Company’s combined heat and power plant in Clarendon, Jamaica (“CHP Plant”) and related security. The Company incurred $ 3,243 in origination, structuring and other fees, which was deferred as a reduction of the principal balance of the CHP Facility on the consolidated balance sheets. As of December 31, 2021, the remaining unamortized deferred financing costs for the CHP Facility was $ 3,180 . Subsequent to December 31, 2021, South Power and the counterparty to the CHP Facility agreed to rescind the CHP Facility and entered into an agreement for the issuance of secured bonds (“South Power 2029 Bonds”) and subsequently authorized the issuance of up to $ 285,000 in CHP Senior Secured Bonds. The South Power 2029 Bonds are secured by, amongst other things, the CHP Plant. Amounts outstanding at the time of the mutual rescission of the CHP Facility of $ 100,000 were credited towards the purchase price of the South Power 2029 Bonds. In February 2022, the Company issued $ 59,730 of South Power 2029 Bonds. The South Power 2029 Bonds will bear interest at an annual fixed rate of 6.50 % and will mature seven years from the closing date of the final tranche. No principal payments will be due until 2025. It is expected that beginning in May 2025, principal payments will be due on a quarterly basis. 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. The South Power 2029 Bonds also provides for customary events of default, prepayment and cure provisions. Revolving Facility In April 2021, the Company entered into a $ 200,000 senior secured revolving facility (the “Revolving Facility”). The proceeds of the Revolving Facility may be used for working capital and other general corporate purposes (including permitted acquisitions and other investments). Letters of credit issued under the $ 100,000 letter of credit sub-facility may be used for general corporate purposes. The Revolving Facility will mature in 2026, with the potential for the Company to extend the maturity date once in a one-year increment. Borrowings under the Revolving Facility will bear interest at a per annum rate equal to LIBOR plus 2.50 % if the usage under the Revolving Facility is equal to or less than 50 % of the commitments under the Revolving Facility and LIBOR plus 2.75 % if the usage under the Revolving Facility is in excess of 50 % of the commitments under the Revolving Facility, subject in each case to a 0.00 % LIBOR floor. Borrowings under the Revolving Facility may be prepaid, at the option of the Company, at any time without premium. The obligations under the Revolving Facility are guaranteed by each domestic subsidiary and foreign subsidiary that is a guarantor under the existing 2025 Notes, and the Revolving Facility is secured by substantially the same collateral as the Company’s existing first lien obligations under the 2025 Notes. The Revolving Facility contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants. Financial covenants include requirements to maintain Debt to Capitalization Ratio of less than 0.7 :1.0, and for quarters in which the Revolving Facility is greater than 50 % drawn, the Debt to Annualized EBITDA Ratio must be less than 5.0 :1.0 for fiscal quarters ending December 31, 2021 until September 30, 2023 and less than 4.0 :1.0 for the fiscal quarter ended December 31, 2023 (each as defined in the Revolving Facility). The Company was in compliance with these covenants as of December 31, 2021. The Company incurred $ 4,321 in origination, structuring and other fees, associated with entry into the Revolving Facility. These costs have been capitalized within Other non-current assets on the consolidated balance sheets. As of December 31, 2021, total remaining unamortized deferred financing costs for the Revolving Facility was $ 3,807 . As of December 31, 2021, the full capacity of the Revolving Facility has been drawn and $ 200,000 remains outstanding. F-41 Table of Contents Lessor VIE debt The Company assumed the following loans in the Mergers related to lessor VIE entities, including CMBL, CCBFL, COSCO and AVIC, that are consolidated as VIEs. Although the Company has no control over the funding arrangements of these entities, the Company is the primary beneficiary of these VIEs and therefore these loan facilities are presented as part of the consolidated financial statements. CCBFL – Nanook SPV facility The SPV, Compass Shipping 23 Corporation Limited, the owner of the Nanook, has a long-term loan facility due to its parent that is denominated in USD, which matures in September 2030 and bears interest at a fixed rate of 2.5 % as of December 31, 2021. As of the acquisition date of Hygo, the outstanding principal balance was $ 202,249 , and the Company recognized the fair value of this facility of $ 201,484 on the date of the Mergers. The discount recognized in purchase accounting will be recognized as additional interest expense until maturity. COSCO – Penguin SPV facility The SPV, Oriental Fleet LNG 02 Limited, the owner of the Penguin, has a long-term loan facility that is denominated in USD, is repayable in quarterly installments with a balloon payment due upon maturity in December 2025 and bears interest at LIBOR plus a margin of 1.7 %. The SPV also has amounts payable to its parent. As of the acquisition date of Hygo, the outstanding principal balance was $ 104,882 , and the Company recognized the fair value of this facility and the amount due to the parent of $ 105,126 on the date of the Mergers. The premium recognized in purchase accounting will result in a reduction to interest expense until maturity. AVIC – Celsius SPV facility The SPV, Noble Celsius Shipping Limited, the owner of the Celsius, has two long-term loan facilities that are denominated in USD. The first facility is repayable in quarterly installments over a term of approximately seven years with a balloon payment of $ 37,179 due upon maturity in May 2027 and bears interest at LIBOR plus a margin of 1.8 %; the outstanding principal balance as of the acquisition date of this facility was $ 76,179 . The SPV has another facility with its parent for the remaining principal of $ 45,200 as of the acquisition date, which is due as a balloon payment upon maturity in March 2023 and bears interest at a fixed rate of 4.0 %. As of the acquisition date of Hygo, the total outstanding principal balance was $ 121,379 , and the Company recognized the fair value of $ 121,308 on the date of the Mergers. The discount recognized in purchase accounting will be recognized as additional interest expense until maturity. CMBL – Eskimo SPV facility The Eskimo SPV, the owner of the Eskimo, had a long-term loan facility that was denominated in USD, had a loan term of ten years and bore interest at a rate of LIBOR plus a margin of 2.66 %. As of the acquisition date of GMLP, the outstanding principal balance was $ 160,520 , and the Company recognized the fair value of this facility of $ 158,072 on the date of the Mergers. The discount recognized in purchase accounting was recognized as additional interest expense until the deconsolidation of the Eskimo SPV. In November 2021, the Company exercised its option to repurchase the Eskimo for a total payment of $ 190,518 . After exercising the repurchase option, the Company no longer has a controlling financial interest in the Eskimo SPV and no longer recognizes the Eskimo SPV facility in the consolidated financial statements. The Company has recognized a loss of $ 10,975 from exiting this financing arrangement in loss on extinguishment of debt, net in the consolidated statements of operations and comprehensive income (loss). Debt and lease restrictions The VIE loans and certain lease agreements with customers assumed in the Mergers contain certain operating and financing restrictions and covenants that require: (a) certain subsidiaries to maintain a minimum level of liquidity of $ 30,000 and consolidated net worth of $ 123,950 , (b) certain subsidiaries to maintain a minimum debt service coverage ratio of 1.20 :1, (c) certain subsidiaries to not exceed a maximum net debt to EBITDA ratio of 6.5 :1, (d) certain subsidiaries to maintain a minimum percentage of the vessel values over the relevant outstanding loan facility balances of either 110 % and 120 %, (e) certain subsidiaries to maintain a ratio of liabilities to total assets of less than 0.70 :1. As of December 31, 2021, the Company was in compliance with all covenants under debt and lease agreements. F-42 Table of Contents Interest Expense Interest and related amortization of debt issuance costs, premiums and discounts 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 years ended December 31, 2021, 2020 and 2019 consisted of the following: Year Ended December 31, 2021 2020 2019 Interest per contractual rates $ 175,420 $ 76,176 $ 32,283 Amortization of fair value adjustments to assumed debt obligations 2,569 - - Amortization of debt issuance costs, premiums and discounts 6,019 15,471 12,301 Interest expense incurred on finance lease obligations 409 - - Total interest costs $ 184,417 $ 91,647 $ 44,584 Capitalized interest 30,093 25,924 25,172 Total interest expense $ 154,324 $ 65,723 $ 19,412 20. Income taxes The components of the Company’s income (loss) before income taxes for the years ended December 31, 2021, 2020 and 2019 were as follows: Year Ended December 31, 2021 2020 2019 United States $ ( 283,363 ) $ ( 166,571 ) $ ( 194,481 ) Foreign 388,535 ( 92,577 ) ( 9,399 ) Income (loss) before taxes $ 105,172 $ ( 259,148 ) $ ( 203,880 ) Income tax expense is comprised of the following for the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 Current: Domestic $ 311 $ - $ - Foreign 20,975 2,063 47 Total current tax expense 21,286 2,063 47 Deferred: Domestic - - - Foreign ( 8,825 ) 2,754 392 Total deferred tax expenses (benefit) ( 8,825 ) 2,754 392 Total provision for (benefit from) income taxes $ 12,461 $ 4,817 $ 439 F-43 Table of Contents Effective Tax Rate A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows: Year Ended December 31, 2021 2020 2019 Income tax at the statutory rate 21.0 % 21.0 % 21.0 % Foreign tax rate differential ( 32.3 ) 2.9 8.7 US taxation on foreign earnings 9.6 ( 2.9 ) - Change in valuation allowance 14.7 ( 14.1 ) ( 12.9 ) Income attributable to non-controlling interest 0.8 ( 6.4 ) ( 18.2 ) Effects of share based compensation ( 8.5 ) - - Withholding taxes 9.5 - - Income tax credits ( 2.4 ) - - Other ( 0.6 ) ( 2.4 ) 1.2 Effective income tax rate 11.8 % ( 1.9 %) ( 0.2 %) As a result of the Mergers, the Company acquired certain operations in jurisdictions that are not subject to income taxes. The effect of these earnings taxed at zero percent, as well as the impact of preferential tax rates are included in the foreign rate differential. The tax effect of each type of temporary difference and carryforward that give rise to a significant deferred tax asset or liability as of December 31, 2021 and 2020 are as follows: Year Ended December 31, 2021 2020 Deferred tax assets: Outside basis difference in partnership $ - $ 64,553 Accrued interest 26,408 18,885 IRC Section 163(j) interest carryforward 21,782 6,909 Federal and state net operating loss carryforward 19,061 32,145 Foreign net operating loss carryforward 43,735 24,525 Lease liability 60,967 4,383 Goodwill 55,394 - Other 26,547 7,863 Total deferred tax assets 253,894 159,263 Valuation allowance ( 146,269 ) ( 132,497 ) Deferred tax assets, net of valuation allowance 107,625 26,766 Deferred tax liabilities: Equity method investments ( 252,224 ) - Property and equipment ( 47,205 ) ( 22,566 ) Lease asset ( 62,403 ) ( 4,215 ) Other ( 9,307 ) - Total deferred tax liabilities $ ( 371,139 ) $ ( 26,781 ) Net deferred tax liabilities $ ( 263,514 ) $ ( 15 ) As of December 31, 2020, the Company effectively held 100 % of the interests in a partnership that owned substantially all of the Company’s operations. On January 1, 2021, the partnership interest was contributed to a wholly-owned corporate entity, effectively liquidating the partnership for federal and state income tax purposes. Prior to the liquidation of the partnership, deferred taxes related to the investment in the partnership were recorded as a single outside basis difference in the Company’s financial statements which represented excess tax basis in the investment over the financial statement carrying value. Subsequent to the liquidation, the Company reports deferred tax assets and liabilities for the tax effect of temporary differences between the tax basis and the financial statement carrying values of each underlying asset and liability of the former partnership including tax basis allocated to goodwill. As a result of the Mergers, the Company recognized net deferred tax liabilities of $ 269,856 that reflect the impact of the financial statement fair value adjustments, principally the increased value of equity method investments. The Company acquired tax attribute carryforwards including net operating losses in certain jurisdictions which were recorded and offset with a valuation allowance as a result of cumulative losses and the developmental status of the entities with the exception of net operating losses that are realizable as a result of taxable temporary differences related to an equity method investment. F-44 Table of Contents Tax Attributes United States As of December 31, 2021, NFE has approximately $ 87,073 of federal and $ 17,915 of state net operating loss carry forwards. The federal and state net operating losses are generally allowed to be carried forward indefinitely and can offset up to 80 percent of future taxable income. 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 of $ 5,431 under Section 382 of the Internal Revenue Code. Foreign Jurisdictions The Company’s foreign subsidiaries file income tax returns in certain foreign jurisdictions. As of December 31, 2021, the Company’s foreign subsidiaries have approximately $ 157,149 of net operating loss carry forwards, of which $ 24,685 will expire, if unused beginning in 2028, and the remaining are allowed to be carried forward indefinitely. Valuation Allowances The following table summarizes the changes in the Company’s valuation allowance on deferred tax assets for the years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 Balance at the beginning of the period $ 132,497 $ 80,911 Change in valuation allowance 13,772 51,586 Balance at the end of the period $ 146,269 $ 132,497 NFE recorded a valuation allowance against its US 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. The US jurisdiction is in a cumulative loss position. As of December 31, 2021, 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 for the amount not supported by reversing taxable temporary differences. 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, generally based on cumulative losses in development stage jurisdictions. Uncertain Taxes The following table summarizes the changes in the Company’s unrecognized tax benefits for the years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 Balance at the beginning of the period $ - $ - Assumed in the Mergers 12,705 - Recognized in the income tax provision ( 231 ) - Balance at the end of the period $ 12,474 $ - F-45 Table of Contents The liability for unrecognized tax benefits is included in Other non-current liabilities on the consolidated balance sheets. The Company accrued $ 1,371 of interest expense during 2021 and has total interest accrued of $ 3,667 as of December 31, 2021. During the years ended December 31, 2020 and 2019, the Company did no t have any unrecognized tax benefits. The Company does not anticipate a material reversal of unrecognized tax benefits during the next 12 months. In addition to the liabilities for unrecognized income tax benefits assumed in the Mergers, the Company assumed liabilities related to potential employment tax obligations that are accounted for under ASC 450 of $ 6,309 . This liability is also included in Other non-current liabilities on the consolidated balance sheets as the liabilities are not expected to be settled in the next 12 months. Income Tax Examinations The Company and its subsidiaries file income tax returns in the U.S. federal and various state and local jurisdictions, as well as various foreign jurisdictions. As a result of the Mergers, the Company has operations in Jordan and Kuwait that are currently under examination. The examinations in Kuwait relate to the 2017 to 2019 tax years and the examinations in Jordan operations relate to the 2015 to 2017 tax years. The Company does not expect the result of the examinations to have a significant impact on income tax expense. The Company filed its first corporate U.S. federal and state income tax returns for the period ended December 31, 2019. The U.S. Federal and state income tax returns filed for tax years 2019 and 2020 are open for examination. The Company is generally open to tax examinations in other foreign jurisdictions for a period of four to six years from the filing of the income tax return. Undistributed Earnings As of December 31, 2021, the Company has recorded a deferred tax liability for undistributed earnings of its Indonesian controlled foreign corporation of approximately $ 2,259 . The Company has not recorded a deferred tax liability for undistributed earnings of any other controlled foreign corporation as of December 31, 2021. The Company has unremitted earnings in certain jurisdictions where distributions can be made at no net tax cost. From time to time, the Company may remit these earnings. The Company has the ability and intent to indefinitely reinvest any earnings that cannot be remitted at no net tax cost. It is not practicable to estimate the amount of any additional taxes which may be payable on these undistributed earnings. Preferential Tax Rates 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 2035. The Company’s Puerto Rican operations received a tax decree from the Puerto Rico government that affords the Company a 4 percent tax rate on qualifying income until 2035. The effect of the earnings taxed at a 4 percent foreign tax rate is included in the foreign rate differential line in the Company’s effective tax rate. For the years ended December 31, 2021 and 2020, the income tax benefits attributable to the tax decree, before taking into consideration the impact on U.S. taxation and the associated U.S. foreign tax credits, are estimated to be approximately $ 14,047 ($ 0.07 per share of issued and outstanding Class A common stock on a diluted basis) and $ 5,550 ($ 0.05 per share of issued and outstanding Class A common stock on a diluted basis), respectively. 21. Commitments and contingencies Legal proceedings and claims The Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business, and the Company has evaluated the contingencies that have been assumed in conjunction with the Mergers. 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. In conjunction with the Mergers, the Company has assumed contingencies for VAT in Indonesia. Indonesian tax authorities have issued letters to PTGI, a consolidated subsidiary, to revoke a previously granted VAT importation waiver for approximately $ 24,000 for the NR Satu . The Company does not believe it probable that a liability exists as no Tax Underpayment Assessment Notice has been received within the statute of limitations period, and the Company believes PTGI will be indemnified by PT Nusantara Regas, the charterer of the NR Satu , for any VAT liability as well as related interest and penalties under the time charter party agreement. F-46 Table of Contents Prior to the Mergers, Indonesian tax authorities also issued tax assessments for land and buildings tax to PTGI for the years 2015 to 2019 in relation to the NR Satu , for approximately $ 3,392 (IDR 48,344.4 million). The Company intends to appeal against the assessments for the land and buildings tax as the tax authorities have not accepted the initial objection letter. The Company believes there are reasonable grounds for success on the basis of no precedent set from past case law and the new legislation effective prospectively from January 1, 2020, that now specifically lists FSRUs as being an object liable to land and buildings tax, when it previously did not. The assessed tax was paid in January 2020 to avoid further penalties and the payment is presented in Other non-current assets on the consolidated balance sheets. Prior to the Mergers, Jordanian tax authorities concluded their tax audit into GMLP’s Jordan branch for the years 2015 and 2016 assessing additional tax of approximately $ 1,600 (JOD 1.10 million) and $ 3,100 (JOD 2.20 million), respectively. The Company has submitted an appeal to the tax notice, and a provision has not been recognized as the Company does not believe that the tax inspector has followed the correct tax audit process and the claim by the tax authorities to not allow tax depreciation is contrary to Jordan’s tax legislation. 22 . Earnings per share Year Ended December 31, 2021 2020 2019 Basic Numerator: Net income (loss) $ 92,711 $ ( 263,965 ) $ ( 204,319 ) Less: net loss attributable to non-controlling interests 4,393 81,818 170,510 Net income (loss) attributable to Class A common stock $ 97,104 $ ( 182,147 ) $ ( 33,809 ) Denominator: Weighted-average shares - basic 198,593,042 106,654,918 20,862,555 Net income (loss) per share - basic $ 0.49 $ ( 1.71 ) $ ( 1.62 ) Diluted Numerator: Net income (loss) $ 92,711 $ ( 263,965 ) $ ( 204,319 ) Less: net loss attributable to non-controlling interests 4,393 81,818 170,510 Less: adjustments attributable to dilutive securities 2,861 - - Net income (loss) attributable to Class A common stock $ 94,243 $ ( 182,147 ) $ ( 33,809 ) Denominator: Weighted-average shares - diluted 201,703,176 106,654,918 20,862,555 Net income (loss) per share - diluted $ 0.47 $ ( 1.71 ) $ ( 1.62 ) The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the years ended December 31, 2020 and 2019 because its effects would have been anti-dilutive. All potentially dilutive securities are included in the computation of diluted net income for the year ended December 31. 2021. Year Ended December 31, 2021 2020 2019 Unvested RSUs (1) - 1,538,060 3,137,415 Class B shares (2) - - 144,342,572 Shannon Equity Agreement shares (3) - 428,275 1,083,995 Total - 1,966,335 148,563,982 (1) Represents the number of instruments outstanding at the end of the period. (2) Class B shares at the end of the period are considered potentially dilutive Class A shares. (3) Class A common stock that would be issued in relation to the Shannon LNG Equity Agreement. The Company declared dividends totaling $ 79,834 during year ended December 31, 2021, representing $ 0.10 per Class A share. The Company paid $ 79,700 of dividends during the year ended December 31, 2021, inclusive of dividends that were accrued in prior periods. After the Mergers, the Company paid a dividend of $ 9,056 to holders of GMLP’s 8.75 % Series A Cumulative Redeemable Preferred Units (“Series A Preferred Units”). As these equity interests have been issued by the Company’s consolidated subsidiary, the value of the Series A Preferred Units is recognized as non-controlling interest in the consolidated financial statements. F-47 Table of Contents 23 . Share-based compensation RSUs The Company has granted RSUs to select officers, employees, non-employee members of the board of directors and select non-employees under the New Fortress Energy Inc. 2019 Omnibus 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, 2021: Restricted Stock Units Weighted-average grant date fair value per share Non-vested RSUs as of December 31, 2020 1,538,060 $ 13.49 Granted - - Vested ( 818,846 ) 13.45 Forfeited ( 42,876 ) 13.71 Non-vested RSUs as of December 31, 2021 676,338 $ 13.49 F-48 Table of Contents The following table summarizes the share-based compensation expense for the Company’s RSUs recorded for the years ended December 31, 2021, 2020 and 2019 : Year Ended December 31, 2021 2020 2019 Operations and maintenance $ 848 $ 800 $ 853 Selling, general and administrative 5,728 7,943 40,594 Total share-based compensation expense $ 6,576 $ 8,743 $ 41,447 For the years ended December 31, 2021 , 2020 and 2019 , cumulative compensation expense recognized for forfeited RSU awards of $ 212 , $ 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, 2021 , the Company had 676,338 non-vested RSUs subject to service conditions and had unrecognized compensation costs of approximately $ 1,031 . 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 0.18 years as of December 31, 2021 . Performance Share Units (“PSUs”) During the first quarter of 2020 and 2021, the Company granted PSUs to certain employees and non-employees that contain a performance condition. Vesting is determined based on achievement of a performance metric for the year subsequent to the grant, and the number of shares that will vest can range from zero to a multiple of units granted. During the fourth quarter of 2021, the Company determined that the 2020 Grant will vest at a multiple of two, resulting in vesting of 2,219,554 PSUs. Compensation cost for the full service period since the grant date of $ 30,467 was recognized in the fourth quarter of 2021. Vesting became probable for the 2020 Grant due to significant cargo sales successfully executed during the fourth quarter of 2021. As of December 31, 2021, the Company determined that it was not probable that the performance condition required for the 2021 Grant to vest would be achieved, and as such, no compensation expense has been recognized for this award. Unrecognized Weighted Average Units Vested / Compensation Remaining Vesting PSUs Granted Units Granted Range of Vesting Probable of Vesting Cost⁽¹⁾ Period Q1 2020 (“2020 Grant”) 1,109,777 0 to 2,219,554 2,219,554 $ - - Q1 2021 (“2021 Grant”) 400,507 0 to 801,014 - 31,932 1 year ⁽¹⁾ Unrecognized compensation cost is based upon the maximum amount of shares that could vest. F-49 Table of Contents 24. Related party transactions Management services 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, charges the Company for administrative and general expenses incurred pursuant to its Administrative Services Agreement (“Administrative Agreement”). The charges under the Administrative Agreement that are attributable to the Company totaled $ 6,509 , $ 7,291 and $ 7,942 for the years ended December 31, 2021, 2020 and 2019, respectively. Costs associated with the Administrative Agreement are included within Selling, general and administrative in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2021 and 2020, $ 5,700 and $ 5,535 were due to Fortress, respectively. F-50 Table of Contents In addition to administrative services, an affiliate of Fortress owns and leases an aircraft chartered by the Company for business purposes in the course of operations. The Company incurred, at aircraft operator rates, charter costs of $ 4,466 , $ 2,483 and $ 5,367 for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021 and 2020, $ 944 and $ 472 was due to this affiliate, respectively . Land lease 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 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 income (loss). The Company recognized expense related to the land lease still held by a related party of $ 526 , $ 730 and $ 396 during the years ended December 31, 2021, 2020 and 2019, respectively, which was included within Operations and maintenance in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2021 and 2020, $ 0 and $ 316 was due to FECI, respectively. As of December 31, 2021 and 2020, the Company has recorded a lease liability of $ 3,314 and $ 3,279 , respectively, within Non-current lease liabilities on the consolidated balance sheets . DevTech 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 was 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. During the third quarter of 2021, the Company settled all outstanding amounts due under notes payable; the consulting agreement was also restructured to settle all previous amounts owed to DevTech and to include a royalty payment based on certain volumes sold in Jamaica. The Company paid $ 988 to settle these outstanding amounts. Subsequent to the restructuring of the consulting agreement, the Company recognized approximately $ 176 in expense for the year ended December 31, 2021. As of December 31, 2021, $ 88 was due to DevTech; no amounts were due from DevTech. As of December 31, 2020, $ 715 was owed to DevTech on the note payable; prior to settlement, the outstanding note payable due to DevTech was included in Other long-term liabilities on the consolidated balance sheets. The interest expense on the note payable due to DevTech was $ 77 and $ 94 for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, $ 343 was due from DevTech. Fortress affiliated entities The Company provides certain administrative services to related parties including Fortress affiliated entities. There are no costs incurred by the Company as the Company is fully reimbursed for all costs incurred. Beginning in the fourth quarter of 2020, the Company began to sublease a portion of office space to an affiliate of an entity managed by Fortress, and for the years ended December 31, 2021 and 2020, $ 799 and $ 204 , respectively, of rent and office related expenses were incurred by this affiliate. As of December 31, 2021 and 2020, $ 1,241 and $ 1,540 were due from 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 $ 2,444 , $ 2,357 and $ 811 for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021 and 2020, $ 2,444 and $ 2,657 were due to Fortress affiliated entities, respectively. F-51 Table of Contents Agency agreement with PT Pesona Sentra Utama (or PT Pesona) PT Pesona, an Indonesian company, owns 51 % of the issued share capital in the Company’s subsidiary, PTGI, the owner and operator of NR Satu , and provides agency and local representation services for the Company with respect to NR Satu . PT Pesona and certain of its subsidiaries also charged vessel management fees to the Company for the provision of technical and commercial management of the vessels; total expenses incurred to PT Pesona were $ 434 for the year ended December 31, 2021, respectively. Hilli guarantees As part of the GMLP Merger, the Company agreed to assume a guarantee (the “Partnership Guarantee”) of 50 % of the outstanding principal and interest amounts payable by Hilli Corp under the Hilli Leaseback. The Company also assumed a guarantee of the letter of credit (“LOC Guarantee”) issued by a financial institution in the event of Hilli Corp’s underperformance or non-performance under the LTA. Under the LOC Guarantee, the Company is severally liable for any outstanding amounts that are payable, up to approximately $ 19,000 . Subsequent to the GMLP Merger, under the Partnership Guarantee and the LOC Guarantee NFE’s subsidiary, GMLP, is required to comply with the following covenants and ratios: • free liquid assets of at least $ 30 million throughout the Hilli Leaseback period; • a maximum net debt to EBITDA ratio for the previous 12 months of 6.5 :1; and • a consolidated tangible net worth of $ 123.95 million. As of December 31, 2021, the amount the Company has guaranteed under the Partnership Guarantee and the LOC Guarantee is $ 356,250 , and the fair value of debt guarantee after amortization, presented under Other current liabilities and Other non-current liabilities on the consolidated balance sheet, amounted to $ 4,918 and $ 2,320 , respectively. As of December 31, 2021 the Company was in compliance with the covenants and ratios for both Hilli guarantees. CELSE inventory purchases During the fourth quarter of 2021, the Company purchased 3.1 TBtus of LNG from CELSE for $ 35,173 . The inventory purchased from CELSE was subsequently sold prior to December 31, 2021. As of December 31, 2021, there were no outstanding amounts payable to CELSE for the purchase of LNG. 25. Customer concentrations For the year ended December 31, 2021, revenue from two significant customers constituted 25 % of the total revenue. In addition, as a result of significant cargo sales revenue generated during 2021, one counterparty constituted 23 % of total revenue for the year ended December 31, 2021. For the year ended December 31, 2020, revenue from three significant customers constituted 88 % of the total revenue. For the year ended December 31, 2019, revenue from two significant customers constituted 74 % of the total revenue. These customers’ revenues are included in the Company’s Terminals and Infrastructure segment. During the years ended December 31, 2021, 2020 and 2019, revenue from external customers that were derived from customers located in the United States were $ 203,477 , $ 135,702 and $ 21,386 , respectively, and from customers outside of the United States were $ 1,119,333 , $ 315,948 , and $ 167,739 . The Company attributes revenue from customers to the country in which the party to the applicable agreement has its principal place of business. As of December 31, 2021 and 2020, long lived assets, which are all non-current assets excluding investment in equity securities, restricted cash, deferred tax assets, goodwill and intangible assets, located in the United States were $ 633,125 and $ 442,199 , respectively, and long lived assets located outside of the United States were $ 4,722,589 and $ 639,370 , respectively, primarily located in Brazil and the Caribbean. F-52 Table of Contents 26. Segments As of December 31, 2021, the Company operates in two reportable segments: Terminals and Infrastructure and Ships: • Terminals and Infrastructure includes the Company’s vertically integrated gas to power solutions, spanning the entire production and delivery chain from natural gas procurement and liquefaction to logistics, shipping, facilities and conversion or development of natural gas-fired power generation. Leased vessels as well as acquired vessels that are utilized in the Company’s terminal or logistics operations are included in this segment. • Ships includes FSRUs and LNG carriers that are leased to customers under long-term or spot arrangements. FSRUs are stationed offshore for customer’s operations to regasify LNG; six of the FSRUs acquired in the Mergers are included in this segment, including the Nanook . LNG carriers are vessels that transport LNG and are compatible with many LNG loading and receiving terminals globally. Five of the LNG carriers acquired in the Mergers are included in this segment. The Company’s investment in Hilli LLC is also included in the Ships segment. The CODM uses Segment Operating Margin to evaluate the performance of the segments and allocate resources. Segment Operating Margin is defined as the segment’s revenue less cost of sales less operations and maintenance less vessel operating expenses, excluding unrealized gains or losses to instruments recognized at fair value. Terminals and Infrastructure Segment Operating Margin includes our effective share of revenue, expenses and operating margin attributable to our 50 % ownership of CELSEPAR. Ships Operating Margin includes our effective share of revenue, expenses and operating margin attributable to our ownership of 50 % of the common units of Hilli LLC. Management considers Segment Operating Margin to be the appropriate metric to evaluate and compare the ongoing operating performance of the Company’s segments on a consistent basis across reporting periods as it eliminates the effect of items which management does not believe are indicative of each segment’s operating performance. The table below presents segment information for the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 (in thousands of $) Terminals and Infrastructure⁽¹⁾ Ships⁽²⁾ Total Segment Consolidation and Other⁽³⁾ Consolidated Statement of operations: Total revenues $ 1,366,142 $ 329,608 $ 1,695,750 $ ( 372,940 ) $ 1,322,810 Cost of sales 789,069 - 789,069 ( 173,059 ) 616,010 Vessel operating expenses 3,442 64,385 67,827 ( 16,150 ) 51,677 Operations and maintenance 92,424 - 92,424 ( 19,108 ) 73,316 Segment Operating Margin $ 481,207 $ 265,223 $ 746,430 $ ( 164,623 ) $ 581,807 Balance sheet: Total assets (4) $ 4,775,392 $ 2,101,100 $ 6,876,492 $ - $ 6,876,492 Other segmental financial information: Capital expenditures (4)(5) $ 833,910 $ 8,293 $ 842,203 $ - $ 842,203 Year Ended December 31, 2020 (in thousands of $) Terminals and Infrastructure⁽¹⁾ Ships⁽²⁾ Total Segment Consolidation and Other⁽³⁾ Consolidated Statement of operations: Total revenues $ 451,650 $ - $ 451,650 $ - $ 451,650 Cost of sales 278,767 - 278,767 - 278,767 Vessel operating expenses - - - - - Operations and maintenance 47,581 - 47,581 - 47,581 Segment Operating Margin $ 125,302 $ - $ 125,302 $ - $ 125,302 Balance sheet: Total assets (4) $ 1,908,091 $ - $ 1,908,091 $ - $ 1,908,091 Other segmental financial information: Capital expenditures (4)(5) $ 340,603 $ - $ 340,603 $ - $ 340,603 F-53 Table of Contents Year Ended December 31, 2019 Terminals and Consolidation (in thousands of $) Infrastructure⁽¹⁾ Ships⁽²⁾ Total Segment and Other⁽³⁾ Consolidated Statement of operations: Total revenues $ 189,125 $ - $ 189,125 $ - $ 189,125 Cost of sales 183,359 - 183,359 - 183,359 Vessel operating expenses - - - - - Operations and maintenance 26,899 - 26,899 - 26,899 Segment Operating Margin $ ( 21,133 ) $ - $ ( 21,133 ) $ - $ ( 21,133 ) Other segmental financial information: Capital expenditures⁽⁵⁾ $ 319,560 $ - $ 319,560 $ - $ 319,560 ⁽¹⁾ Terminals and Infrastructure includes the Company’s effective share of revenues, expenses and operating margin attributable to 50 % ownership of CELSEPAR. The losses attributable to the investment of $ 17,925 for the year ended December 31, 2021 are reported in income from equity method investments on the consolidated statements of operations and comprehensive income (loss). Terminals and Infrastructure does not include the unrealized mark-to-market loss on derivative instruments of $ 2,788 for the year ended December 31, 2021 reported in Cost of sales. ⁽²⁾ Ships includes the Company’s effective share of revenues, expenses and operating margin attributable to 50 % ownership of the Hilli Common Units. The earnings attributable to the investment of $ 32,368 for the year ended December 31, 2021 are reported in income from equity method investments on the consolidated statements of operations and comprehensive income (loss). ⁽³⁾ Consolidation and Other adjusts for the inclusion of the effective share of revenues, expenses and operating margin attributable to 50 % ownership of CELSEPAR and Hilli Common Units in our segment measure and exclusion of the unrealized mark-to-market gain or loss on derviative instruments. ⁽⁴⁾ Total assets and capital expenditure by segment refers to assets held and capital expenditures related to the development of the Company’s terminals and vessels. The Terminals and Infrastructure segment includes the net book value of vessels utilized within the Terminals and Infrastructure segment. ⁽⁵⁾ Capital expenditures includes amounts capitalized to construction in progress and additions to property, plant and equipment during the period. Consolidated Segment Operating Margin is defined as net income (loss), adjusted for selling, general and administrative expenses, transaction and integration costs, depreciation and amortization, interest expense, other (income) expense, income from equity method investments and tax expense. The following table reconciles Net income (loss), the most comparable financial statement measure, to Consolidated Segment Operating Margin: Year Ended December 31, (in thousands of $) 2021 2020 2019 Net income (loss) $ 92,711 $ ( 263,965 ) $ ( 204,319 ) Add: Selling, general and administrative 199,881 120,142 152,922 Transaction and integration costs 44,671 4,028 - Contract termination charges and loss on mitigation sales - 124,114 5,280 Depreciation and amortization 98,377 32,376 7,940 Interest expense 154,324 65,723 19,412 Other (income) expense, net ( 17,150 ) 5,005 ( 2,807 ) Loss on extinguishment of debt, net 10,975 33,062 - (Income) from equity method investments ( 14,443 ) - - Tax provision 12,461 4,817 439 Consolidated Segment Operating Margin $ 581,807 $ 125,302 $ ( 21,133 ) F-54 Table of Contents 27. Subsequent events On February 28, 2022, the Company entered into an amendment to the Revolving Facility to increase the commitments thereunder by $ 115,000 . Borrowings under the Revolving Facility will now bear interest at a per annum rate based on the Secured Overnight Financing Rate, as opposed to LIBOR. The Applicable Margin for borrowings under the Revolving Facility based on the current usage of the facility has not changed. No changes were made to the maturity date or covenants. F-55 Schedule II Description Balance at Beginning of Year Additions (1)(2) Deductions Balance at End of Year Year ended December 31, 2021 Allowance for expected credit losses $ 545 $ 1,614 $ - $ 2,159 Year ended December 31, 2020 Allowance for expected credit losses - 545 - 545 Year ended December 31, 2019 Allowance for doubtful accounts 257 - ( 257 ) - Note (1) Amount expensed is included within Selling, general and administrative. (2) Additions in 2020 include the cumulative effect of accounting change upon adoption of ASC 326 of $ 229 which is included within Accumulated deficit. F-56