New Fortress Energy Inc. 10-Q

Item 1. Financial Statements. New Fortress Energy Inc. Condensed Consolidated Balance Sheets As of March 31, 2022 and December 31, 2021 (Unaudited, in thousands of U.S. dollars, except share amounts) March 31, 2022 December 31, 2021 Assets Current assets Cash and cash equivalents $ 156,173 $ 187,509 Restricted cash 74,873 68,561 Receivables, net of allowances of $ 164 and $ 164 , respectively 238,614 208,499 Inventory 54,273 37,182 Prepaid expenses and other current assets, net 82,392 83,115 Total current assets 606,325 584,866 Restricted cash 7,960 7,960 Construction in progress 1,238,313 1,043,883 Property, plant and equipment, net 2,160,025 2,137,936 Equity method investments 1,327,444 1,182,013 Right-of-use assets 419,819 309,663 Intangible assets, net 135,650 142,944 Finance leases, net 601,953 602,675 Goodwill 760,135 760,135 Deferred tax assets, net 6,048 5,999 Other non-current assets, net 102,136 98,418 Total assets $ 7,365,808 $ 6,876,492 Liabilities Current liabilities Current portion of long-term debt $ 100,666 $ 97,251 Accounts payable 81,126 68,085 Accrued liabilities 252,859 244,025 Current lease liabilities 60,552 47,114 Other current liabilities 83,128 106,036 Total current liabilities 578,331 562,511 Long-term debt 3,836,610 3,757,879 Non-current lease liabilities 336,399 234,060 Deferred tax liabilities, net 239,060 269,513 Other long-term liabilities 57,503 58,475 Total liabilities 5,047,903 4,882,438 Commitments and contingencies (Note 21) Stockholders’ equity Class A common stock, $ 0.01 par value, 750.0 million shares authorized, 207.5 million issued and outstanding as of March 31, 2022; 206.9 million issued and outstanding as of December 31, 2021 2,076 2,069 Additional paid-in capital 1,888,842 1,923,990 Retained earnings (accumulated deficit) 105,870 ( 132,399 ) Accumulated other comprehensive income (loss) 116,789 ( 2,085 ) Total stockholders’ equity attributable to NFE 2,113,577 1,791,575 Non-controlling interest 204,328 202,479 Total stockholders’ equity 2,317,905 1,994,054 Total liabilities and stockholders’ equity $ 7,365,808 $ 6,876,492 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Table of Contents New Fortress Energy Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the three months ended March 31, 2022 and 2021 (Unaudited, in thousands of U.S. dollars, except share and per share amounts) Three Months Ended March 31, 2022 2021 Revenues Operating revenue $ 400,075 $ 91,196 Vessel charter revenue 92,420 — Other revenue 12,623 54,488 Total revenues 505,118 145,684 Operating expenses Cost of sales 208,298 96,671 Vessel operating expenses 22,964 — Operations and maintenance 23,168 16,252 Selling, general and administrative 48,041 33,617 Transaction and integration costs 1,901 11,564 Depreciation and amortization 34,290 9,890 Total operating expenses 338,662 167,994 Operating income (loss) 166,456 ( 22,310 ) Interest expense 44,916 18,680 Other (income), net ( 19,725 ) ( 604 ) Net income (loss) before income from equity method investments and income taxes 141,265 ( 40,386 ) Income from equity method investments 50,235 — Tax benefit ( 49,681 ) ( 877 ) Net income (loss) 241,181 ( 39,509 ) Net (income) loss attributable to non-controlling interest ( 2,912 ) 1,606 Net income (loss) attributable to stockholders $ 238,269 $ ( 37,903 ) Net income (loss) per share – basic $ 1.14 $ ( 0.21 ) Net income (loss) per share – diluted $ 1.13 $ ( 0.21 ) Weighted average number of shares outstanding – basic 209,928,070 176,500,576 Weighted average number of shares outstanding – diluted 210,082,295 176,500,576 Other comprehensive income (loss): Net income (loss) $ 241,181 $ ( 39,509 ) Currency translation adjustment 120,830 ( 997 ) Comprehensive income (loss) 362,011 ( 40,506 ) Comprehensive (income) loss attributable to non-controlling interest ( 4,868 ) 2,480 Comprehensive income (loss) attributable to stockholders $ 357,143 $ ( 38,026 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents New Fortress Energy Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity For the three months ended March 31, 2022 and 2021 (Unaudited, in thousands of U.S. dollars, except share amounts) Class A common stock Additional paid-in capital Retained earnings (accumulated deficit) Accumulated other comprehensive (loss) income Non- controlling interest Total stockholders’ equity Shares Amount Balance as of December 31, 2021 206,863,242 $ 2,069 $ 1,923,990 $ ( 132,399 ) $ ( 2,085 ) $ 202,479 $ 1,994,054 Net income — — — 238,269 — 2,912 241,181 Other comprehensive income — — — — 118,874 1,956 120,830 Share-based compensation expense — — 880 — — — 880 Issuance of shares for vested RSUs 1,121,255 7 — — — — 7 Shares withheld from employees related to share-based compensation, at cost ( 442,146 ) — ( 15,274 ) — — — ( 15,274 ) Dividends — — ( 20,754 ) — — ( 3,019 ) ( 23,773 ) Balance as of March 31, 2022 207,542,351 $ 2,076 $ 1,888,842 $ 105,870 $ 116,789 $ 204,328 $ 2,317,905 Class A common stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive (loss) income Non- controlling interest Total stockholders’ equity Shares Amount Balance as of December 31, 2020 174,622,862 $ 1,746 $ 594,534 $ ( 229,503 ) $ 182 $ 8,127 $ 375,086 Net loss — — — ( 37,903 ) — ( 1,606 ) ( 39,509 ) Other comprehensive loss — — — — ( 123 ) ( 874 ) ( 997 ) Share-based compensation expense — — 1,770 — — — 1,770 Issuance of shares for vested RSUs 1,335,787 — — — — — — Shares withheld from employees related to share-based compensation, at cost ( 638,235 ) — ( 27,571 ) — — — ( 27,571 ) Dividends — — ( 17,598 ) — — — $ ( 17,598 ) Balance as of March 31, 2021 175,320,414 $ 1,746 $ 551,135 $ ( 267,406 ) $ 59 $ 5,647 $ 291,181 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents New Fortress Energy Inc. Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2022 and 2021 (Unaudited, in thousands of U.S. dollars) Three Months Ended March 31, 2022 2021 Cash flows from operating activities Net income (loss) $ 241,181 $ ( 39,509 ) Adjustments for: Amortization of deferred financing costs and debt guarantee, net 3,424 400 Depreciation and amortization 34,852 10,160 (Earnings) of equity method investees ( 50,235 ) — Drydocking expenditure ( 2,454 ) — Dividends received from equity method investees 7,609 — Change in market value of derivatives ( 24,855 ) — Deferred taxes ( 58,769 ) ( 1,412 ) Share-based compensation 880 1,770 Other 997 393 Changes in operating assets and liabilities, net of acquisitions: (Increase) in receivables ( 58,462 ) ( 19,223 ) (Increase) in inventories ( 18,617 ) ( 5,171 ) (Increase) in other assets ( 15,440 ) ( 36,943 ) Decrease in right-of-use assets 17,016 9,772 Increase (Decrease) in accounts payable/accrued liabilities 68,520 ( 22,399 ) Increase in amounts due to affiliates 2,035 1,879 (Decrease) in lease liabilities ( 11,773 ) ( 10,584 ) (Decrease) in other liabilities ( 21,527 ) ( 1,119 ) Net cash provided by (used in) operating activities 114,382 ( 111,986 ) Cash flows from investing activities Capital expenditures ( 189,221 ) ( 80,810 ) Entities acquired in asset acquisitions, net of cash acquired — ( 8,817 ) Other investing activities — ( 630 ) Net cash (used in) investing activities ( 189,221 ) ( 90,257 ) Cash flows from financing activities Proceeds from borrowings of debt 200,836 — Payment of deferred financing costs ( 3,504 ) ( 670 ) Repayment of debt ( 123,669 ) — Payments related to tax withholdings for share-based compensation ( 13,054 ) ( 29,564 ) Payment of dividends ( 23,773 ) ( 17,657 ) Net cash provided by (used in) financing activities 36,836 ( 47,891 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 12,979 — Net (decrease) in cash, cash equivalents and restricted cash ( 25,024 ) ( 250,134 ) Cash, cash equivalents and restricted cash – beginning of period 264,030 629,336 Cash, cash equivalents and restricted cash – end of period $ 239,006 $ 379,202 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 $ 19,838 $ 26,311 Liabilities associated with consideration paid for entities acquired in asset acquisitions — 11,845 ` The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents 1. Organization New Fortress Energy Inc. (“NFE,” together with its subsidiaries, the “Company”), a Delaware corporation, is a global energy infrastructure company founded to help address energy poverty and accelerate the world’s transition to reliable, affordable and clean energy. The Company owns and operates natural gas and liquefied natural gas ("LNG") infrastructure and an integrated fleet of ships and logistics assets to rapidly deliver turnkey energy solutions to global markets. The Company has liquefaction, regasification and power generation operations in the United States, Jamaica and Brazil. 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.” 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 a terminal and power plant under development in the State of Pará, Brazil (the “Barcarena Facility” and " Barcarena Power Plant," respectively), a terminal under development on the southern coast of Brazil (the “Santa Catarina Facility”) and the Nanook , a newbuild FSRU moored and in service at the Sergipe Facility. As a result of the Mergers, 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. Acquired FSRUs are operating in Brazil, Kuwait, Indonesia 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. Basis of presentation The accompanying unaudited interim condensed consolidated financial statements contained herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all normal and recurring adjustments which are, in the opinion of management, necessary to provide a fair statement of the financial position, results of operations and cash flows of the Company for the interim periods presented. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual audited consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2021. Certain prior year amounts have been reclassified to confirm to current year presentation. The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions, impacting the reported amounts of assets and liabilities, net earnings and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. Actual results could be different from these estimates. 3. Adoption of new and revised standards (a) New standards, amendments and interpretations issued but not effective for the year beginning January 1, 2022: The Company has reviewed recently issued accounting pronouncements and concluded that such pronouncements are either not applicable to the Company or no material impact is expected in the consolidated financial statements as a result of future adoption. (b) New and amended standards adopted by the Company: In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 requires entities to provide expanded disclosures about the terms and features of convertible instruments and amends certain guidance in ASC 260 on the computation of EPS for convertible instruments and contracts on an entity’s own equity. ASU 2020-06 is effective for public companies for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with 5 Table of Contents early adoption of all amendments in the same period permitted. The adoption of this guidance in the first quarter of 2022 did not have a material impact on the Company’s financial position, results of operations or cash flows. 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 expanded 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 determined it was the accounting acquirer of Hygo, which was accounted for under the acquisition method of accounting for business combinations. The total purchase price of the transaction was 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. 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 March 31, 2022, 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 follows: 6 Table of Contents 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 Construction in process 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 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 SPVs (both defined below) 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 was $ 8,009 , which approximated the gross contractual amount; no material amounts were expected to be uncollectible. Goodwill was 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 three months ended March 31, 2022 include Hygo’s result of operations for the entire quarter. Revenue and net income attributable to Hygo during the period was $ 21,962 and $ 120,698 , 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. 7 Table of Contents With the GMLP Merger, the Company acquired vessels to support the existing terminals and business development pipeline, as well as an interest in a floating natural gas 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 determined it is the accounting acquirer of GMLP, which was accounted for under the acquisition method of accounting for business combinations. The total purchase price of the transaction was 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 March 31, 2022, 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: 8 Table of Contents 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 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 was $ 4,797 , which approximated the gross contractual amount; no material amounts were 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 was $ 106,500 and the fair value of the unfavorable contracts was $ 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 condensed consolidated statements of operations and comprehensive loss in the second quarter of 2021. The Company’s results of operations for the three months ended March 31, 2022 include GMLP’s result of operations for the entire quarter. Revenue and net income (loss) attributable to GMLP during the period was $ 73,041 and $ 55,738 , respectively. 9 Table of Contents 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 long-term liabilities on the condensed 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. 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 included 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. 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 long-term liabilities on the condensed 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. 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 condensed 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, o ne of which was terminated in 2021. As part of these financings, the vessel was sold to a single asset entity wholly owned by the lending bank (a special purpose vehicle or "SPV") and then leased back. While the Company does not hold an equity investment in these lending entities, these entities are variable interest entities ("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 NFE's 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. 10 Table of Contents 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. As of March 31, 2022, the Penguin and Celsius were recorded as Property, plant and equipment, net on the condensed consolidated balance sheet, and the Nanook was recognized in Finance leases, net on the condensed consolidated balance sheet. The following table gives a summary of the sale and leaseback arrangements, including repurchase options and obligations as of March 31, 2022: 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 June 2022 $ 196,083 $ 94,179 Penguin December 2025 December 2022 84,668 63,040 Celsius March 2027 March 2023 86,456 45,000 A summary of payment obligations under the bareboat charters with the lessor VIEs as of March 31, 2022, are shown below: Vessel Remaining 2022 2023 2024 2025 2026 2027+ Nanook $ 17,521 $ 22,686 $ 22,004 $ 21,266 $ 20,556 $ 70,788 Penguin 9,812 12,694 12,203 8,852 — — Celsius 12,627 16,195 15,508 14,794 13,308 — 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 condensed consolidated balance sheet as of March 31, 2022 are as follows: Nanook Penguin Celsius Assets Restricted cash $ 9,541 $ 5,690 $ 26,713 Liabilities Long-term interest bearing debt - current portion $ — $ 18,850 $ 5,799 Long-term interest bearing debt - non-current portion 187,385 68,875 105,460 The most significant impact of the lessor VIEs operations on the Company’s condensed consolidated statement of operations is an addition to interest expense of $ 2,014 for the three months ended March 31, 2022. 11 Table of Contents The most significant impact of the lessor VIEs cash flows on the condensed consolidated statements of cash flows is net cash used in financing activities of $ 4,312 for the three months ended March 31, 2022. 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. As of March 31, 2022 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 $ 372,450 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. Trade creditors of PTGI have no recourse to the Company's 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 LNG cargo sales of $ 285,171 for the three months ended March 31, 2022 . The Company had no such sales in the first quarter of 2021. Other revenue includes revenue for development services as well as interest income from the Company’s finance leases and other revenue. Under most customer contracts, invoicing occurs once the Company’s performance obligations have been satisfied, at which point payment is unconditional. As of March 31, 2022 and December 31, 2021, receivables related to revenue from contracts with customers totaled $ 213,476 and $ 192,533 , respectively, and were included in Receivables, net on the condensed consolidated balance sheets, net of current expected credit losses of $ 164 and $ 164 , 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 and receivables associated with reimbursable costs. 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 12 Table of Contents expected to be satisfied during the next 12 months, and the contract liabilities are classified within Other current liabilities on the condensed 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 March 31, 2022 and December 31, 2021 are detailed below: March 31, 2022 December 31, 2021 Contract assets, net - current $ 7,613 $ 7,462 Contract assets, net - non-current 34,738 36,757 Total contract assets, net $ 42,351 $ 44,219 Contract liabilities $ 10,915 $ 2,951 Revenue recognized in the year from: Amounts included in contract liabilities at the beginning of the year $ 560 $ 8,028 Contract assets are presented net of expected credit losses of $ 442 and $ 442 as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, contract assets was comprised of $ 42,045 and $ 43,839 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 March 31, 2022, the Company has capitalized $ 10,830 of which $ 604 of these costs is presented within Other current assets and $ 10,226 is presented within Other non-current assets on the condensed consolidated balance sheets. As of December 31, 2021, the Company had capitalized $ 10,981 , of which $ 604 of these costs was presented within Other current assets and $ 10,377 was presented within Other non-current assets on the condensed 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 Remainder of 2022 $ 207,152 2023 520,335 2024 516,660 2025 507,868 2026 505,729 Thereafter 8,141,219 Total $ 10,398,963 13 Table of Contents 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. 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: March 31, 2022 December 31, 2021 Property, plant and equipment $ 1,275,195 $ 1,274,234 Accumulated depreciation ( 43,887 ) ( 31,849 ) Property, plant and equipment, net $ 1,231,308 $ 1,242,385 The components of lease income from vessel operating leases for the three months ended March 31, 2022 were as follows: Three Months Ended March 31, 2022 Operating lease income $ 80,222 Variable lease income 10,564 Total operating lease income $ 90,786 The Company’s charter of the Nanook to CELSE (defined below) and certain equipment leases provided in connection with the supply of natural gas or LNG are accounted for as finance leases. The Company recognized interest income of $ 11,581 for the three months ended March 31, 2022 related to the finance lease of the Nanook included within Other revenue in the condensed consolidated statements of operations and comprehensive income (loss). The Company recognized revenue of $ 1,634 for the three months ended March 31, 2022 related to the operation and services agreement within Vessel charter revenue in the condensed consolidated statements of operations and comprehensive income (loss). As of March 31, 2022, there were outstanding balances due from CELSE of $ 6,911 , of which $ 4,388 is recognized in Receivables, net and a loan to CELSE of $ 2,523 is recognized in Prepaid expenses and other current assets, net on the condensed consolidated balance sheets. As of December 31, 2021, there were outstanding balances due from CELSE of $ 6,428 of which $ 4,371 was recognized in Receivables, net and a loan to CELSE of $ 2,057 was recognized in Prepaid expenses and other current assets, net on the condensed 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. 14 Table of Contents The following table shows the expected future lease payments as of March 31, 2022, for the remainder of 2022 through 2026 and thereafter: Future cash receipts Financing Leases Operating Leases Remainder of 2022 $ 37,740 $ 209,621 2023 50,616 147,375 2024 51,442 104,148 2025 51,876 25,961 2026 52,147 — Thereafter 1,051,956 — Total minimum lease receivable $ 1,295,777 $ 487,105 Unguaranteed residual value 107,000 Gross investment in sales-type lease $ 1,402,777 Less: Unearned interest income 795,356 Less: Current expected credit losses 1,551 Net investment in leased asset $ 605,870 Current portion of net investment in leased asset $ 3,917 Non-current portion of net investment in leased asset 601,953 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 right-of-use 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 right-of-use 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. 15 Table of Contents As of March 31, 2022 and December 31, 2021, right-of-use assets, current lease liabilities and non-current lease liabilities consisted of the following: March 31, 2022 December 31, 2021 Operating right-of-use-assets $ 396,688 $ 285,751 Finance right-of-use-assets 23,131 23,912 Total right-of-use assets $ 419,819 $ 309,663 Current lease liabilities: Operating lease liabilities $ 56,616 $ 43,395 Finance lease liabilities 3,936 3,719 Total current lease liabilities $ 60,552 $ 47,114 Non-current lease liabilities: Operating lease liabilities $ 322,416 $ 219,189 Finance lease liabilities 13,983 14,871 Total non-current lease liabilities $ 336,399 $ 234,060 For the three months ended March 31, 2022 and 2021, the Company’s operating lease cost recorded within the condensed consolidated statements of operations and comprehensive income (loss) were as follows: Three Months Ended March 31, 2022 2021 Fixed lease cost $ 18,500 $ 11,745 Variable lease cost 470 693 Short-term lease cost 4,225 722 Lease cost - Cost of sales $ 20,903 $ 11,036 Lease cost - Operations and maintenance 765 557 Lease cost - Selling, general and administrative 1,527 1,567 For the three months ended March 31, 2022 and 2021, the Company has capitalized $ 8,242 and $ 1,199 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 transport inventory from a supplier’s facilities to the Company’s storage locations which are capitalized to inventory. 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 three months ended March 31, 2022, the Company recognized interest expense related to finance leases of $ 229 which is included within Interest expense, net in the condensed consolidated statements of operations and comprehensive income (loss). For the three months ended March 31, 2022, the Company recognized amortization of the right-of-use asset related to finance leases of $ 379 which are included within Depreciation and amortization in the condensed consolidated statements of operations and comprehensive income (loss). 16 Table of Contents Cash paid for operating leases is reported in operating activities in the condensed consolidated statements of cash flows. Supplemental cash flow information related to leases was as follows for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Operating cash outflows for operating lease liabilities $ 27,122 $ 12,660 Financing cash outflows for finance lease liabilities 1,308 — Right-of-use assets obtained in exchange for new operating lease liabilities 127,451 — The future payments due under operating and finance leases as of March 31, 2022 are as follows: Operating Leases Financing Leases Due remainder of 2022 $ 66,326 $ 3,607 2023 72,928 4,362 2024 66,582 4,381 2025 58,126 4,381 2026 50,123 2,625 Thereafter 233,102 1,029 Total Lease Payments $ 547,187 $ 20,385 Less: effects of discounting 168,155 2,466 Present value of lease liabilities $ 379,032 $ 17,919 Current lease liability $ 56,616 $ 3,936 Non-current lease liability 322,416 13,983 As of March 31, 2022, the weighted-average remaining lease term for operating leases was 8.6 years and finance leases was 4.9 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 March 31, 2022 and December 31, 2021 was 8.4 % and 8.7 %, respectively. The weighted average discount rate associated with finance leases as of March 31, 2022 and December 31, 2021 was 5.1 % and 5.1 %, respectively. 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. 17 Table of Contents The following table summarizes the terms of interest rate and cross currency interest rate swaps as of March 31, 2022: Instrument Notional Amount (in thousands) Maturity Dates Fixed Interest Rate Forward Foreign Exchange Rate Interest rate swap: Receiving floating, pay fixed $ 348,000 March 31, 2026 2.86 % N/A Cross currency interest rate swap - Debenture Loan, due 2024 BRL 198,600 September 2024 5.90 % 5.424 The mark-to-market gain or loss on interest rate and foreign currency swaps that are not designated as hedges for accounting purposes are reported in Other (income), net in the condensed consolidated statements of operations and comprehensive income (loss). 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). 18 Table of Contents The following table presents the Company’s financial assets and financial liabilities, including those that are measured at fair value, as of March 31, 2022 and December 31, 2021: Fair Value Hierarchy March 31, 2022 Carrying Value March 31, 2022 Fair Value December 31, 2021 Carrying Value December 31, 2021 Fair Value Valuation Technique Non-Derivatives: Cash and cash equivalents Level 1 $ 156,173 $ 156,173 $ 187,509 $ 187,509 Market approach Restricted cash Level 1 82,833 82,833 76,521 76,521 Market approach Investment in equity securities Level 1 11,003 11,003 11,195 11,195 Market approach Investment in equity securities Level 3 7,678 7,678 7,678 7,678 Market approach Long-term debt (1) Level 2 3,977,615 3,968,695 3,895,255 3,910,425 Market approach Derivatives: Derivative liability (2)(3) Level 3 30,331 30,331 30,686 30,686 Income approach Equity agreement (3)(4) Level 3 20,083 20,083 18,163 18,163 Income approach Cross-currency interest rate swap asset (5)(7) Level 2 5,115 5,115 — — Income approach Cross-currency interest rate swap and Interest rate swap liability (6)(7) Level 2 3,929 3,929 21,929 21,929 Income approach (1) Long-term debt is recorded at amortized cost on the condensed consolidated balance sheets, and is presented in the above table gross of deferred financing costs of $ 40,339 and $ 40,125 as of March 31, 2022 and December 31, 2021, respectively. (2) Consideration due to the sellers in assets acquisitions 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 condensed 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 the average yield curve for bonds with similar credit ratings and matching terms to the discount periods as well as a probability of the contingent event occurring. (4) To be paid upon the satisfaction in full of all conditions precedent related to the development, construction and operation of the facility in Shannon, Ireland. The liability associated with the equity agreement is recorded within Other current liabilities on the condensed consolidated balance sheets. (5) Cross-currency interest rate swap asset is present within Other non-current assets on the condensed consolidated balance sheets as of March 31, 2022. (6) Interest rate swap liability is presented within Other current liabilities on the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021; this balance includes the liability for the cross-currency interest rate swap liability as of December 31, 2021. (7) 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 March 31, 2022 and December 31, 2021 and are classified as Level 1 within the fair value hierarchy. 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. 19 Table of Contents These adjustments have been recorded within Other (income), net in the condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Derivative liability/Equity agreement - Fair value adjustment - (Gain) $ ( 446 ) $ ( 425 ) Interest rate swap - Fair value adjustment - (Gain) ( 15,833 ) — Cross currency interest rate swap - Fair value adjustment - (Gain) ( 8,576 ) — During the three months ended March 31, 2022 and 2021, 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. Under the Company’s interest rate swap, the Company is required to provide cash collateral, and as of March 31, 2022 and December 31, 2021, $ 12,500 of cash collateral is presented as restricted cash on the condensed consolidated balance sheets. 9. Restricted cash As of March 31, 2022 and December 31, 2021, restricted cash consisted of the following: March 31, 2022 December 31, 2021 Cash held by lessor VIEs $ 41,944 $ 35,651 Collateral for letters of credit and performance bonds 27,633 27,614 Collateral for interest rate swaps 12,500 12,500 Other restricted cash 756 756 Total restricted cash $ 82,833 $ 76,521 Current restricted cash $ 74,873 $ 68,561 Non-current restricted cash 7,960 7,960 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 condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021. 10. Inventory As of March 31, 2022 and December 31, 2021, inventory consisted of the following: March 31, 2022 December 31, 2021 LNG and natural gas inventory $ 27,744 $ 16,815 Automotive diesel oil inventory 8,236 4,789 Bunker fuel, materials, supplies and other 18,293 15,578 Total inventory $ 54,273 $ 37,182 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 condensed consolidated statements of operations and comprehensive income (loss). No adjustments were recorded during the three months ended March 31, 2022 and 2021. 20 Table of Contents 11. Prepaid expenses and other current assets As of March 31, 2022 and December 31, 2021, prepaid expenses and other current assets consisted of the following: March 31, 2022 December 31, 2021 Prepaid expenses $ 22,435 $ 19,951 Recoverable taxes 35,352 33,053 Due from affiliates 3,236 3,299 Other current assets 21,369 26,812 Total prepaid expenses and other current assets, net $ 82,392 $ 83,115 Other current assets as of March 31, 2022 and December 31, 2021 primarily consists of deposits, as well as the current portion of contract assets (Note 6) and finance leases (Note 6). 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: March 31, 2022 Equity method investments as of December 31, 2021 $ 1,182,013 Dividends ( 7,609 ) Equity in earnings of investees 50,235 Foreign currency translation adjustment 102,805 Equity method investments as of March 31, 2022 $ 1,327,444 The carrying amount of equity method investments as of March 31, 2022 is as follows: March 31, 2022 Hilli LLC $ 372,450 CELSEPAR 954,994 Total $ 1,327,444 As of March 31, 2022 and 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 $ 739,659 and $ 792,995 , respectively, 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. 21 Table of Contents Hilli LLC The Company acquired 50 % of the Hilli Common Units as part of the GMLP Merger. 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, determines the amount of Hilli LLC’s available cash and appropriate reserves, and Hilli LLC makes a distribution to the unitholders of Hilli LLC of the available cash, subject to such reserves. Hilli LLC makes distributions when declared by GLNG, provided that no distributions may be made on the Hilli Common Units unless current and accumulated Series A Distributions and Series B Distributions have been paid. The Company is required to reimburse other investors in Hilli LLC or may receive reimbursements from other investors in Hilli LLC for 50 % of the amount, if any, by which certain operating expenses and withholding taxes of Hilli LLC are above or below an annual threshold. During the three months ended March 31, 2022, operating expense reimbursements did not significantly impact distributions made by Hilli LLC. 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 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 %. 13. Construction in progress The Company’s construction in progress activity during the three months ended March 31, 2022 is detailed below: March 31, 2022 Balance at beginning of period $ 1,043,883 Additions 196,946 Impact of currency translation adjustment 40,327 Transferred to property, plant and equipment, net ( 42,843 ) Balance at end of period $ 1,238,313 Interest expense of $ 13,137 and $ 2,641 , inclusive of amortized debt issuance costs, was capitalized for the three months ended March 31, 2022 and 2021, respectively. The Company’s development activities are primarily in Latin America 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. 22 Table of Contents 14. Property, plant and equipment, net As of March 31, 2022 and December 31, 2021, the Company’s property, plant and equipment, net consisted of the following: March 31, 2022 December 31, 2021 Vessels $ 1,498,582 $ 1,461,211 Terminal and power plant equipment 213,449 206,889 CHP facilities 123,073 122,777 Gas terminals 169,142 167,614 ISO containers and other equipment 138,259 134,775 LNG liquefaction facilities 63,213 63,213 Gas pipelines 58,987 58,987 Land 54,347 55,008 Leasehold improvements 9,377 9,377 Accumulated depreciation ( 168,404 ) ( 141,915 ) Total property, plant and equipment, net $ 2,160,025 $ 2,137,936 Depreciation expense for the three months ended March 31, 2022 and 2021 totaled $ 26,109 and $ 9,842 , respectively, of which $ 563 and $ 270 , respectively, is included within Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss). Capitalized drydocking costs of $ 8,691 and $ 5,914 are included in the vessel cost for March 31, 2022 and December 31, 2021, respectively, which are depreciated from the completion of drydocking until the next expected dry docking. 15. Goodwill and intangible assets Goodwill As of March 31, 2022 and December 31, 2021, the carrying amount of goodwill was $ 760,135 , all of which was included within the Terminals and Infrastructure segment. Intangible assets The following table summarizes the composition of intangible assets as of March 31, 2022 and December 31, 2021: March 31, 2022 Gross Carrying Amount Accumulated Amortization Currency Translation Adjustment Net Carrying Amount Weighted Average Life Definite-lived intangible assets Favorable vessel charter contracts $ 106,500 $ ( 36,630 ) $ — $ 69,870 3 Permits and development rights 48,217 ( 3,516 ) 159 44,860 38 Acquired power purchase agreements 16,585 ( 1,173 ) 3,050 18,462 17 Easements 1,556 ( 255 ) — 1,301 30 Indefinite-lived intangible assets Easements 1,191 — ( 34 ) 1,157 n/a Total intangible assets $ 174,049 $ ( 41,574 ) $ 3,175 $ 135,650 23 Table of Contents 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 Amortization expense for the three months ended March 31, 2022 was $ 8,343 , which is inclusive of reductions in expense for the amortization of unfavorable contract liabilities assumed in the Mergers. Amortization expense for the three months ended March 31, 2021 was $ 295 . 16. Other non-current assets As of March 31, 2022 and December 31, 2021, Other non-current assets consisted of the following: March 31, 2022 December 31, 2021 Contract asset, net (Note 6) $ 34,738 $ 36,757 Investments in equity securities (Note 8) 18,681 18,873 Cost to fulfill (Note 6) 10,226 10,377 Upfront payments to customers 9,601 9,748 Other 28,890 22,663 Total other non-current assets, net $ 102,136 $ 98,418 The Company recognized an unrealized (loss) gain on its investments in equity securities of $( 192 ) and $ 137 for the three months ended March 31, 2022 and 2021, respectively, within Other (income), net in the condensed consolidated statements of operations and comprehensive income (loss). Investments in equity securities include investments without a readily determinable fair value of $ 7,678 as of March 31, 2022 and December 31, 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. 24 Table of Contents 17. Accrued liabilities As of March 31, 2022 and December 31, 2021, accrued liabilities consisted of the following: March 31, 2022 December 31, 2021 Accrued development costs $ 109,597 $ 101,177 Accrued vessel operating and drydocking expenses 31,951 12,767 Accrued interest 13,553 61,630 Accrued consideration in asset acquisition 9,515 9,330 Accrued bonuses 5,832 27,591 Other accrued expenses 82,411 31,530 Total accrued liabilities $ 252,859 $ 244,025 As of March 31, 2022, the balance presented as other accrued expenses includes accruals of $ 49,459 for inventory purchases completed in the first quarter of 2022. 18. Other current liabilities As of March 31, 2022 and December 31, 2021 , other current liabilities consisted of the following: March 31, 2022 December 31, 2021 Equity agreements (Note 8) $ 20,083 $ 18,163 Deferred revenue 18,925 28,662 Income tax payable 10,481 8,881 Interest rate swaps (Note 8) 3,929 21,929 Due to affiliates 11,122 9,088 Other current liabilities 18,588 19,313 Total other current liabilities $ 83,128 $ 106,036 Deferred revenue includes contract liabilities and prepayments received from lessees under charter agreements. Other current liabilities includes the value of unfavorable contracts assumed in the Mergers. 25 Table of Contents 19. Debt As of March 31, 2022 and December 31, 2021, debt consisted of the following: March 31, 2022 December 31, 2021 Senior Secured Notes, due September 2025 $ 1,241,721 $ 1,241,196 Senior Secured Notes, due September 2026 1,478,514 1,477,512 Vessel Term Loan Facility, due September 2024 394,239 408,991 Debenture Loan due September 2024 41,177 40,665 South Power 2029 Bonds 170,256 96,820 Revolving Facility 225,000 200,000 Subtotal (excluding lessor VIE loans) 3,550,907 3,465,184 CCBFL VIE loan: Golar Nanook SPV facility, due September 2030 187,385 186,638 COSCO VIE loan: Golar Penguin SPV facility, due December 2025 87,725 90,035 AVIC VIE loan: Golar Celsius SPV facility, due September 2023/May 2027 111,259 113,273 Total debt $ 3,937,276 $ 3,855,130 Current portion of long-term debt $ 100,666 $ 97,251 Long-term debt 3,836,610 3,757,879 Our outstanding debt as of March 31, 2022 is repayable as follows: March 31, 2022 Due remainder of 2022 $ 64,055 2023 135,420 2024 325,328 2025 1,337,876 2026 1,754,095 Thereafter 361,476 Total debt $ 3,978,250 Add: fair value adjustments to assumed debt obligations ( 635 ) Less: deferred finance charges ( 40,339 ) Total debt, net deferred finance charges $ 3,937,276 The terms of the Company's debt instruments have been described in NFE's Annual Report on Form 10-K. There have been no significant changes to the Company's outstanding debt, other than described below. South Power 2029 Bonds 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”) is located and related security. In January 2022, 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 South Power 2029 Bonds. The South Power 2029 Bonds are 26 Table of Contents 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 the first quarter of 2022, the Company issued $ 75,783 of South Power 2029 Bonds for a total amount outstanding of $ 175,783 as of March 31, 2022. The South Power 2029 Bonds bear interest at an annual fixed rate of 6.50 % and mature seven years from the closing date of the final tranche. The Company expects to begin paying principal payments on a quarterly basis in July 2025. 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. In conjunction with obtaining the CHP Facility, the Company incurred $ 3,243 in origination, structuring and other fees. The rescission of the CHP Facility and issuance of South Power 2029 Bonds was treated as a modification, and fees attributable to lenders that participated in the CHP Facility will be amortized over the life of the South Power 2029 Bonds; additional third party fees associated with such lenders of $ 258 were recognized as expense in the first quarter of 2022. Additional fees for new lenders participating in the South Power 2029 Bonds were recognized as a reduction of the principal balance on the condensed consolidated balance sheets. As of March 31, 2022 and December 31, 2021, the remaining unamortized deferred financing costs for the CHP Facility was $ 5,527 and $ 3,180 , respectively. Revolving Facility In April 2021, the Company entered into a $ 200,000 senior secured revolving credit 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). In February 2022, the Revolving Facility was amended to increase the borrowing capacity by $ 115,000 to $ 315,000 . 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 bear interest at a 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 % 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 certain of the Company's subsidiaries, in addition to other collateral. The Company incurred $ 5,398 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 condensed consolidated balance sheets. As of March 31, 2022 and December 31, 2021, total remaining unamortized deferred financing costs for the Revolving Facility was $ 4,661 and $ 3,807 , respectively. 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 March 31, 2022, the Company was in compliance with all covenants under debt and lease agreements. Financial covenants under GMLP's Vessel Term Loan Facility include requirements that GMLP and the borrowing subsidiary 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 million, each as defined in the Vessel Term Loan Facility. GMLP was in compliance with these covenants as of March 31, 2022 . 27 Table of Contents The Company is also required to comply with covenants under the Revolving Facility and letter of credit facility, including 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. The Company was in compliance with all covenants as of March 31, 2022. 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 three months ended March 31, 2022 and 2021 consisted of the following: Three Months Ended March 31, 2022 2021 Interest per contractual rates $ 55,349 $ 20,834 Amortization of debt issuance costs, premiums and discounts 2,475 487 Interest expense incurred on finance lease obligations 229 — Total interest costs $ 58,053 $ 21,321 Capitalized interest 13,137 2,641 Total interest expense $ 44,916 $ 18,680 20. Income taxes As a result of the Mergers, the Company recognized deferred tax liabilities to reflect the impact of fair value adjustments, primarily the increased value of equity method investments, which did not impact tax basis. The Company acquired tax attribute carryforwards including net operating losses in certain jurisdictions for which net deferred tax assets have not been recognized as a result of cumulative losses and the developmental status of the entities. The effective tax rate for the three months ended March 31, 2022 was ( 25.94 )%, compared to 2.20 % for the three months ended March 31, 2021. The total tax benefit for the three months ended March 31, 2022 was $ 49,681 , compared to a benefit of $ 877 for the three months ended March 31, 2021. The calculation of the effective tax rate includes income from equity method investments recognized for the three months ended March 31, 2022. The decrease to the effective tax rate for the three months ended March 31, 2022 resulted principally from the remeasurement of the deferred income tax liability in conjunction with an internal reorganization. The Company’s equity method investment in CELSEPAR is now directly held by a subsidiary domiciled in the United Kingdom; the investment was previously held by a subsidiary domiciled in Brazil, and this reorganization resulted in a discrete tax benefit o f $ 76,460 . This increase in tax benefit for the three months ended March 31, 2022 was offset in part by an increase in pretax income for certain profitable operations, including GMLP and Hygo, which resulted in income tax expense for the three months ended March 31, 2022. During the second quarter of 2021, the Company assumed a liability for tax contingencies in the Mergers primarily related to potential tax obligations for payments under certain charter agreements for acquired vessels; this liability is included in Other long-term liabilities on the condensed consolidated balance sheets. As of March 31, 2022 and December 31, 2021, the Company has recognized a liability for these uncertain tax positions of $ 12,370 and $ 12,474 , respectively. 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. 21. Commitments and contingencies Legal proceedings and claims 28 Table of Contents The Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. The Company does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows. 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. 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 $ 3,400 (IDR 48,378.3 million). The Company appealed 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 condensed 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 believes 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 Three Months Ended March 31, 2022 2021 Numerator: Net income (loss) $ 241,181 $ ( 39,509 ) Less: net (income) loss attributable to non-controlling interests ( 2,912 ) 1,606 Net income (loss) attributable to Class A common stock $ 238,269 $ ( 37,903 ) Denominator: Weighted-average shares - basic 209,928,070 176,500,576 Net income (loss) per share - basic $ 1.14 $ ( 0.21 ) Weighted-average shares - diluted 210,082,295 176,500,576 Net income (loss) per share - diluted $ 1.13 $ ( 0.21 ) The following table presents potentially dilutive securities excluded from the computation of diluted net income per share for the three months ended March 31, 2022 and 2021 because its effects would have been anti-dilutive. March 31, 2022 March 31, 2021 Unvested RSUs — 869,262 Shannon Equity Agreement shares 472,084 464,267 Total 472,084 1,333,529 The Company declared and paid dividends of $ 20,754 during the first quarter of 2022, representing $ 0.10 per Class A share. The Company declared $ 17,598 and paid $ 17,657 during the first quarter of 2021, representing $ 0.10 per Class A 29 Table of Contents share. The Company's dividend payment during the first quarter of 2021 included dividends that were accrued in prior periods. During the first quarter of 2022, the Company paid a dividend of $ 3,019 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 condensed consolidated financial statements . 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 three months ended March 31, 2022: Restricted Stock Units Weighted-average grant date fair value per share Non-vested RSUs as of December 31, 2021 676,338 $ 13.49 Granted 12,196 29.89 Vested ( 515,194 ) 13.99 Forfeited — — Non-vested RSUs as of March 31, 2022 173,340 $ 13.27 The following table summarizes the share-based compensation expense for the Company’s RSUs recorded for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Operations and maintenance $ 4 $ 222 Selling, general and administrative 876 1,548 Total share-based compensation expense $ 880 $ 1,770 For both the three months ended March 31, 2022 and 2021, no cumulative compensation expense recognized for forfeited RSU awards 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 March 31, 2022, the Company had 173,340 non-vested RSUs subject to service conditions and had unrecognized compensation costs of approximately $ 515 . 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 0.27 years as of March 31, 2022. 30 Table of Contents 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 the recognition of all compensation cost associated with this award. As of March 31, 2022, 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. PSUs Granted Units Granted Range of Vesting Units Vested / Probable of Vesting Unrecognized Compensation Cost (1) Weighted Average Remaining Vesting Period Q1 2020 ("2020 Grant") 1,109,777 0 to 2,219,554 2,105,522 $ — 0 Q1 2021 ("2021 Grant") 400,507 0 to 801,014 — 30,878 0.75 years (1) Unrecognized compensation cost is based upon the maximum amount of shares that could vest. 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 $ 1,515 and $ 1,927 for the three months ended March 31, 2022 and 2021, respectively. Costs associated with the Administrative Agreement are included within Selling, general and administrative in the condensed consolidated statements of operations and comprehensive income (loss). As of March 31, 2022 and December 31, 2021, $ 7,057 and $ 5,700 were due to Fortress, respectively. 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 market rates, charter costs of $ 1,022 and $ 1,609 for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022 and December 31, 2021, $ 1,022 and $ 944 was due to this affiliate, respectively. Land lease The Company has leased land from Florida East Coast Industries, LLC (“FECI”), which is controlled by funds managed by an affiliate of Fortress. The Company recognized expense related to the land lease of $ 103 and $ 126 during the three months ended March 31, 2022 and 2021, respectively, which was included within Operations and maintenance in the condensed consolidated statements of operations and comprehensive income (loss). As of March 31, 2022 and December 31, 2021, the Company has recorded a lease liability of $ 3,321 and $ 3,314 , respectively, within Non-current lease liabilities on the condensed consolidated balance sheet. DevTech investment In August 2018, the Company entered into a consulting arrangement with DevTech Environment Limited (“DevTech”) to provide business development services to increase the customer base of the Company. DevTech also contributed cash consideration in exchange for a 10 % interest in a consolidated subsidiary. The 10 % interest is reflected as non-controlling interest in the Company’s condensed 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 $ 98 in expense for the three months ended March 31, 2022. As of March 31, 2022 and December 31, 2021, $ 98 and $ 88 was due to DevTech, respectively. 31 Table of Contents 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 subleasing a portion of office space and related administrative services to an affiliate of an entity managed by Fortress, and for the three months ended March 31, 2022 and 2021, $ 195 and $ 153 of rent and office related expenses were incurred by this affiliate, respectively. As of March 31, 2022 and December 31, 2021, $ 712 and $ 1,241 were due from all Fortress affiliated entities, 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 $ 600 and $ 803 for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022 and December 31, 2021, $ 3,043 and $ 2,444 were due to Fortress affiliated entities, respectively. 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 . During the period after the Mergers, PT Pesona did not receive any agency fees. PT Pesona and certain of its subsidiaries charged vessel management fees to the Company for the provision of technical and commercial management of the vessels amounting to $ 191 for the three months ended March 31, 2022. 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 . As of March 31, 2022, Company has guaranteed $ 348,000 under the Partnership Guarantee. 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. The fair value of debt guarantees after amortization of $ 4,918 and $ 1,090 , has been presented within Other current liabilities and Other long-term liabilities, respectively, on the condensed consolidated balance sheet. As of March 31, 2022, the Company was in compliance with the covenants and ratios for both Hilli guarantees. 25. Segments As of March 31, 2022, 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. 32 Table of Contents 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 financial instruments recognized at fair value. Terminals and Infrastructure Segment Operating Margin includes our effective share of revenue, expenses and segment operating margin attributable to our 50 % ownership of CELSEPAR. Ships Segment 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 three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 (in thousands of $) Terminals and Infrastructure (1) Ships (2) Total Segment Consolidation and Other (3) Consolidated Statement of operations: Total revenues $ 480,349 $ 114,942 $ 595,291 $ ( 90,173 ) $ 505,118 Cost of sales 235,532 — 235,532 ( 27,234 ) 208,298 Vessel operating expenses 3,492 25,942 29,434 ( 6,470 ) 22,964 Operations and maintenance 30,242 — 30,242 ( 7,074 ) 23,168 Segment Operating Margin $ 211,083 $ 89,000 $ 300,083 $ ( 49,395 ) $ 250,688 Balance sheet: Total assets (4) $ 5,291,601 $ 2,074,207 $ 7,365,808 $ — $ 7,365,808 Other segmental financial information: Capital expenditures (4)(5) $ 196,390 $ 3,289 $ 199,679 $ — $ 199,679 Three Months Ended March 31, 2021 (in thousands of $) Terminals and Infrastructure (1) Ships (2) Total Segment Consolidation and Other (3) Consolidated Statement of operations: Total revenues $ 145,684 $ — $ 145,684 $ — $ 145,684 Cost of sales 96,671 — 96,671 — 96,671 Vessel operating expenses — — — — — Operations and maintenance 16,252 — 16,252 — 16,252 Segment Operating Margin $ 32,761 $ — $ 32,761 $ — $ 32,761 Balance sheet: Total assets (4) $ 1,832,111 $ — $ 1,832,111 $ — $ 1,832,111 Other segmental financial information: Capital expenditures (4)(5) $ 106,895 $ — $ 106,895 $ — $ 106,895 33 Table of Contents (1) Terminals and Infrastructure includes the Company’s effective share of revenues, expenses and operating margin attributable to 50 % ownership of CELSEPAR. The earnings attributable to the investment of $ 36,680 for the three months ended March 31, 2022 are reported in income from equity method investments in the condensed consolidated statements of operations and comprehensive income (loss). Terminals and Infrastructure does not include the unrealized mark-to-market gain on derivative instruments of $ 2,492 for the three months ended March 31, 2022 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 $ 13,555 for the three months ended March 31, 2022, are reported in income from equity method investments in the condensed 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 the segment measure and exclusion of the unrealized mark-to-market gain or loss on derivative 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 (benefit) provision. The following table reconciles Net income (loss), the most comparable financial statement measure, to Consolidated Segment Operating Margin: Three Months Ended March 31, (in thousands of $) 2022 2021 Net income (loss) $ 241,181 $ ( 39,509 ) Add: Selling, general and administrative 48,041 33,617 Transaction and integration costs 1,901 11,564 Depreciation and amortization 34,290 9,890 Interest expense 44,916 18,680 Other (income), net ( 19,725 ) ( 604 ) Tax benefit ( 49,681 ) ( 877 ) (Income) from equity method investments ( 50,235 ) — Consolidated Segment Operating Margin $ 250,688 $ 32,761 26. Subsequent events On May 4, 2022, the Company entered into an amendment to the Revolving Facility to increase the commitments thereunder by $ 125,000 , for a total capacity under the Revolving Facility of $ 440,000 . 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. 34 Table of Contents