What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-05 compared with 2022-05-06 · 273 added, 210 removed, 300 unchanged (62% of the section changed)

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Business and Properties” under “Sustainability—Toward a Carbon-Free Future.”

On April 15, 2021, we completed the acquisitions of Hygo and 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.

On April 15, 2021, we completed the acquisitions of Hygo (the "Hygo Merger" and GMLP (the "GMLP Merger,"and collectively with the Hygo Merger, the “Mergers”) As a result of the Hygo Merger, we 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, we 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 our existing facilities and international project pipeline.

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The Sergipe Power Plant is one of the largest natural gas-fired thermal power stations in Latin America and was built to provide electricity on demand throughout the Brazilian electric integrated system, particularly during dry seasons when hydropower is unable to meet the growing demand for electricity in the country.

CELSE has executed multiple PPAs pursuant to which the Sergipe Power Plant is delivering power to 26 committed offtakers (utilities) for a period of 25 years.

CELSE has executed multiple PPAs pursuant to which the Sergipe Power Plant is delivering power to 26 committed offtakers for a period of 25 years.

In any period in which power is not being produced pursuant to the PPAs, we are able to sell merchant power into the electricity grid at spot prices, subject to local regulatory approval.

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(“Ebrasil”), an affiliate of Eletricidade do Brasil S.A.

, of which we own 75%.

, of which we own a 75% interest.

These rights include 190 acres of land and regulatory permits for two new power generation projects of 1.7GW in the aggregate.

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The Sergipe Facility is capable of processing up to 790,000 MMBtu per day and storing up to 170,000 cubic meters of LNG and supplies approximately 230,000 MMBtu per day (30% of the Sergipe Facility’s maximum regasification capacity) of natural gas to the Sergipe Power Plant, at full dispatch.

In June 2022, we announced the sale of the Sergipe Facility and our interest in the Sergipe Power Plant to Eneva S.A.

See "Recent Developments"

Miami Facility

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Our Current Operations – Ships

Our Ships segment includes six FSRUs and five LNGCs, which are leased to customers under long-term or spot arrangements, including a 25-year charter of Nanook with CELSE.

Our Ships segment includes six FSRUs and five LNG carriers, which are leased to customers under long-term or spot arrangements, including a 25-year charter of Nanook with CELSE.

As these charter arrangements expire, we expect to use these vessels in our terminal operations and reflect such vessels in our Terminals and Infrastructure segment.

We began to use one acquired LNGC in our terminal operations in the third quarter of 2021, and the results of operations of this vessel are no longer included in the Ships segment.

One acquired LNG carrier and one acquired FSRU are utilized in our terminal operations, and the results of operations of these vessels are reflected in the Terminals and Infrastructure segment.

In July 2022, we announced a financing transaction with an affiliate of Apollo Global Management, Inc.

collateralized by our vessels.

See "Recent Developments"

The Company’s investment in Hilli LLC, owner and operator of the Hilli , is also included in the Ships segment.

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Natural gas supply to the La Paz Power Plant may be increased to approximately 29,000 MMBtu of LNG per day for up to 135MW of power.

We are exploring a potential sale of the La Paz Power Plant;

we do not plan to recognize a loss on the sale.

Puerto Sandino Facility

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The Barcarena Facility will be capable of processing up to 790,000 MMBtu per day and storing up to 170,000 cubic meters of LNG.

The Barcarena Facility is expected to supply gas to a new 605MW combined cycle thermal power plant to be located in Pará, Brazil (the “Barcarena Power Plant”), which is supported by multiple 25-year power purchase agreement to supply electricity to the national electricity grid.

The Barcarena Facility is expected to supply gas to third-party industrial and power customers as well as a new 605MW combined cycle thermal power plant to be located in Pará, Brazil which we own (the “Barcarena Power Plant”), which is supported by multiple 25-year power purchase agreement to supply electricity to the national electricity grid.

The power project is scheduled to deliver power to nine committed offtakers for 25 years beginning in 2025.

Santa Catarina Facility

The Santa Catarina Facility will be located on the southern coast of Brazil and will consist of an FSRU with a processing capacity of approximately 570,000 MMBtu per day and LNG storage capacity of up to 170,000 cubic meters.

The Santa Catarina Facility will be located on the southern coast of Brazil and will consist of an FSRU with a processing capacity of approximately 570,000 MMBtus per day and LNG storage capacity of up to 170,000 cubic meters.

We are also developing a 33-kilometer, 20-inch pipeline that will connect the Santa Catarina Facility to the existing inland Transportadora Brasileira Gasoduto Bolivia-Brasil S.A.

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The Santa Catarina Facility and associated pipeline are expected to have a total addressable market of 15 million cubic meters per day.

Suape Facility

We are developing our LNG terminal in the State of Pernambuco, Brazil (the “Suape Facility”).

We intend for the Suape Facility to supply LNG to a 288MW thermoelectric power plant to also be located in the State of Pernambuco, Brazil (the “Suape Power Plant”).

With the purchase of CH4 Energia Ltda.

on January 12, 2021, we have obtained certain key permits and authorizations to develop an LNG terminal and up to 1.37GW of gas-fired power at the Port of Suape.

We also own certain 15-year power purchase agreements totaling 288MW for the development of two thermoelectric power plants, in the State of Bahia, Brazil, following the acquisition of 100% of the outstanding shares of Pecém Energia S.A.

(“Pecém”) and Energética Camaçari Muricy II S.A.

(“Muricy”) on March 11, 2021.

As of January 2022, we had commenced power sales under these power purchase agreements via forward selling agreements.

We are seeking to obtain the necessary approvals from ANEEL and other relevant regulatory authorities in Brazil to transfer the site for the power purchase agreements to the Suape Facility and to update the technical characteristics to develop and construct an initial 288MW gas-fired power plant and LNG import terminal at the Port of Suape.

Sri Lanka Facility

We plan to develop an offshore LNG receiving, storage and regasification terminal to supply the Kerawalapitya Power Complex, in Colombo, Sri Lanka, where 310 MW of power is operational today and an additional 700 MW is scheduled to be built.

We expect to initially provide the equivalent of an estimated 35,000 MMBtu of LNG per day, with the expectation of significant growth as new power plants become operational.

We may develop an offshore LNG receiving, storage and regasification terminal to supply the Kerawalapitya Power Complex, in Colombo, Sri Lanka, where 310 MW of power is operational today and an additional 700 MW is scheduled to be built.

Ireland Facility

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We are in the process of obtaining final planning permission from An Bord Pleanála (“ABP”) in Ireland, and we intend to begin construction of the Ireland Facility after we have obtained the necessary consents and secured contracts with downstream customers with volumes sufficient to support the development.

We are currently developing a series of modular floating liquefaction facilities to provide a source of low-cost supply of liquefied natural gas for our growing customer base.

We are currently developing a series of modular floating liquefaction facilities to provide a source of low-cost supply of LNG for our growing customer base.

The “Fast LNG” design pairs advancements in modular, midsize liquefaction technology with jack up rigs, semi-submersible rigs or similar marine floating infrastructure to enable a much lower cost and faster deployment schedule than today’s floating liquefaction vessels.

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We are in active discussions to develop projects in multiple regions around the world that may have significant demand for additional power, LNG and natural gas, although there can be no assurance that these discussions will result in additional contracts or that we will be able to achieve our target pricing or margins.

In particular, we are currently in discussions with Petróleos Mexicanos (“Pemex”) to form a long-term strategic partnership to develop the Lakach deepwater natural gas field for Pemex to supply natural gas to Mexico's onshore domestic market and for NFE to produce LNG for export to global markets.

If the parties form a partnership, NFE expects to invest in the continued development of the Lakach field over a two-year period by completing seven offshore wells and to deploy a 1.4 MTPA Fast LNG unit to liquefy the majority of the produced natural gas.

Remaining natural gas and associated condensate volumes are expected to be utilized by Pemex in Mexico's onshore domestic market.

Recent Developments

On May 31, 2022, LNG Power Limited (“LNG Power”), an indirect subsidiary of NFE and direct owner of the CELSEPAR investment, and certain Ebrasil sellers as owners of CELSEPAR (together with LNG Power, the “Sergipe Sellers”), Eneva S.A., as purchaser ("Eneva") and Eletricidade do Brasil S.A.

-- Ebrasil , entered into a Share Purchase Agreement (“SPA”) pursuant to which Eneva has agreed to acquire all of the outstanding shares of CELSEPAR and CEBARRA for a purchase price of R$ 6.10 billion in cash (approximately $ 1.17 billion using the exchange rate as of June 30, 2022 ) (the “Sergipe Sale”).

The purchase price payable by Eneva accrues interest at a rate of CDI + 1% from the December 31, 2021 until the date of the Closing (as defined below) and is subject to certain customary adjustments, including for the amount of any leakage that has occurred from December 31, 2021 to the date of the Closing, including (a) making distributions or payments to or for the benefit of Sergipe Sellers and their affiliates and assuming or incurring liabilities for the benefit of Sergipe Sellers or their affiliates, and (b) certain fees and expenses incurred by CELSEPAR and CEBARRA in connection with the Sergipe Sale.

LNG Power also entered into a foreign currency forward associated to mitigate foreign currency risk to the expected proceeds from the transaction and will settle at the same time as Closing.

Under the SPA, the closing of the Sergipe Sale (the “Closing”) will occur on the later of (a) October 3, 2022 and (b) the 10th business day after all conditions to Closing have been satisfied or waived , or as otherwise agreed to among the parties .

The conditions to Closing include receipt of all required regulatory approvals, receipt of certain specified material third-party consents and the approval of the Sergipe Sale by Eneva’s shareholders.

The Sergipe Sale may be terminated under certain circumstances, including, among others, (a) by either Eneva or Sergipe Sellers if Closing has not occurred on or before the date that is 270 days from the execution date of the SPA, (b) automatically if the Sergipe Sale is not approved by Eneva’s shareholders.

The SPA further provides that, (i) upon termination of the SPA under certain circumstances, Eneva will be required to pay the Sergipe Sellers a reverse termination fee equal to R$300 million and (ii) upon termination of the SPA under certain other circumstances, the Sergipe Sellers will be required to pay Eneva a termination fee equal to R$250 million.

In connection with the Sergipe Sale, we have recognized an other than temporary impairment of the investment in CELSEPAR of $345,447, and this loss has been recognized in loss (income) from equity method investments in the condensed consolidated statements of operations and comprehensive income (loss).

Upon closing, we expect to recognize transaction costs associated with the sale of CELSEPAR.

The assets of CEBARRA primarily consist of construction in progress, and in conjunction with the Sergipe Sale, the assets of CEBARRA meet the criteria to be represented as held for sale and stated at fair value.

These assets were reviewed for impairment upon classification to held for sale, and the Company recognized an impairment loss of $48,109 in Asset impairment expense in the condensed consolidated statements of operations and comprehensive income (loss).

Vessel Financing Transaction

On July 2, 2022, certain affiliates of NFE (collectively, the “Vessel Sellers”) and a separate affiliate of NFE acting as contributor (the “Contributor”, together with the Vessel Sellers, the “NFE Vessel Group”) entered into an Equity Purchase and Contribution Agreement (the “Purchase Agreement”) with AP Neptune Holdings Ltd.

(“Purchaser”), which is affiliated with certain funds or investment vehicles managed by affiliates of Apollo Global Management, Inc.

(the “Purchaser Group”), pursuant to which (1) the Contributor and the Purchaser formed a joint venture (the “JV”), (2) the Vessel Sellers agreed to sell to the Purchaser eight vessels, (3) the Purchaser will contribute the eight vessels to the JV and (4) the Contributor will contribute three additional vessels to the JV.

In connection with the transaction, the Nanook SPV facility, Penguin SPV facility, Celsius SPV facility and Vessel Term Loan Facility are expected to be extinguished.

The cash purchase price for the transaction is subject to customary purchase price adjustments, and after giving effect to the repayment of existing debt, we expect to receive net cash proceeds of approximately $1.1 billion (the "Vessel Financing Transaction").

In connection with the transaction, certain of our affiliates will enter into long-term time charter agreements for a period up to 20 years in respect of ten of the eleven vessels, the terms of which will commence upon the expiration of each vessel's existing charter.

The Purchase Agreement contains customary representations, warranties and covenants by each of the NFE Vessel Group, the Contributor and the Purchaser Group.

Closing of the transactions contemplated by the Purchase Agreement is subject to customary conditions, including the absence of a material adverse effect, but is not subject to any regulatory or financing condition or contingency.

Closing is expected to occur in the third quarter of 2022.

The Purchase Agreement contains termination rights for each of the NFE Vessel Group and the Purchaser Group, including for the material uncured breach of either the NFE Vessel Group or the Purchaser Group and for the failure to consummate the transactions by December 30, 2022.

Upon termination of the Purchase Agreement under specified circumstances, the Purchaser Group would owe to the NFE Vessel Group a termination fee of approximately $80 million.

Since August 2021, LNG prices have increased materially, and global events, such as Russia’s invasion of Ukraine, have generated further energy pricing volatility.

We have supply commitments to secure LNG volumes equal to approximately 100% of our expected needs for our Montego Bay Facility, Old Harbour Facility, San Juan Facility, La Paz Facility and Puerto Sandino Facility for the next six years.

Due to this significant increase in market pricing of LNG, we have optimized our supply portfolio to sell a portion of these cargos in the market, and these sales have positively impacted our results for the first quarter of 2022.

Cargo sales of 9.7 TBtus were completed in the first quarter of 2022, increasing our revenues and results of operations for the three months ended March 31, 2022.

COVID-19 Pandemic

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We have implemented policies to screen employees, contractors, and vendors for COVID-19 symptoms upon entering our development projects, operations and office facilities.

From the beginning of 2020 to March 31, 2022, we have incurred approximately $2.2 million to date for safety measures introduced into our operations and other responses to the COVID-19 pandemic.

From the beginning of 2020 to June 30, 2022, we have incurred approximately $2.4 million to date for safety measures introduced into our operations and other responses to the COVID-19 pandemic.

We are actively monitoring the spread of the pandemic and the actions that governments and regulatory agencies are taking to fight the spread.

We have not experienced significant disruptions in development projects, charter or terminal operations from the COVID-19 pandemic;

however, there are important uncertainties including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures.

however, there are important uncertainties including the scope, severity and duration of the pandemic and resurgences of COVID-19 variants, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures.

We do not currently expect these factors to have a significant impact on our results of operations, liquidity or financial position, or our development budgets or timelines.

Other Matters

On June 18, 2020, we received an order from FERC, which asked us to explain why our San Juan Facility is not subject to FERC’s jurisdiction under section 3 of the NGA.

On June 18, 2020, we received an order from the Federal Energy Regulatory Commission ("FERC") which asked for an explanation as to why our San Juan Facility is not subject to FERC’s jurisdiction under section 3 of the NGA.

Because we do not believe that the San Juan Facility is jurisdictional, we provided our reply to FERC on July 20, 2020 and requested that FERC act expeditiously.

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FERC also concluded that no enforcement action against us is warranted, presuming we comply with the requirements of the order.

Parties to the proceeding, including the Company, sought rehearing of the March 19, 2021 FERC order, and FERC denied all requests for rehearing in an order issued on July 15, 2021.

We have filed petitions for review of FERC’s March 19 and July 15 orders with the United States Court of the Appeals for the District of Columbia Circuit.

No other party has sought review of FERC’s orders.

While our petitions for review are pending, and in order to comply with the FERC’s directive, on September 15, 2021 we filed an application for authorization to operate the San Juan Facility, which remains pending.

Results of Operations – Three Months Ended March 31, 2022 compared to Three Months Ended December 31, 2021 and Three Months Ended March 31, 2021

Segment performance is evaluated based on operating margin and the tables below present our segment information for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021:

Parties to the proceeding, including the Company, sought rehearing of the March 19, 2021 FERC order, and FERC has denied all requests for rehearing, and the FERC order was affirmed by the United States Court of Appeals for the District of Columbia Circuit on June 14, 2022.

To comply with the FERC’s directive, on September 15, 2021, we filed an application for authorization to operate the San Juan Facility, which remains pending.

Results of Operations – Three Months Ended June 30, 2022 compared to Three Months Ended March 31, 2022 and Six Months Ended June 30, 2022 compared to Six Months Ended June 30, 2021

Segment performance is evaluated based on operating margin and the tables below present our segment information for the three months ended June 30, 2022 and March 31, 2022, and for the six months ended June 30, 2022 and June 30, 2021:

Three Months Ended June 30, 2022

(in thousands of $) Terminals and

Infrastructure (1)

Total Segment Consolidation

and Other (3)

Total revenues $ 543,455 $ 111,024 $ 654,479 $ (69,624) $ 584,855

Cost of sales 271,948 — 271,948 453 272,401

Vessel operating expenses 4,255 21,288 25,543 (6,915) 18,628

Operations and maintenance 29,540 — 29,540 (9,050) 20,490

Segment Operating Margin $ 237,712 $ 89,736 $ 327,448 $ (54,112) $ 273,336

Three Months Ended March 31, 2022

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Segment Operating Margin $ 211,083 $ 89,000 $ 300,083 $ (49,395) $ 250,688

Three Months Ended December 31, 2021

Six Months Ended June 30, 2022

(in thousands of $) Terminals and

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Segment Operating Margin $ 448,795 $ 178,736 $ 627,531 $ (103,507) $ 524,024

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

(in thousands of $) Terminals and

Infrastructure Ships Total Segment Consolidation

and Other Consolidated

Infrastructure (1)

Total Segment Consolidation

and Other (3)

Total revenues $ 327,232 $ 95,762 $ 422,994 $ (53,471) $ 369,523

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(1) Terminals and Infrastructure includes our effective share of revenues, expenses and operating margin attributable to 50% ownership of CELSEPAR.

The earnings and losses attributable to the investment of $36,680 and $18,580 for the three months ended March 31, 2022 and December 31, 2021, respectively, are reported in income (loss) from equity method investments in the consolidated statements of operations and comprehensive income (loss).

Terminals and Infrastructure does not include the unrealized mark-to-market gain and loss on derivative instruments of $2,492 and $472 for the three months ended March 31, 2022 and December 31, 2021, respectively, reported in Cost of sales.

The losses and earnings attributable to the investment of $389,996 and $36,680 for the three months ended June 30, 2022 and March 31, 2022, respectively, are reported in (Loss) income from equity method investments in the condensed consolidated statements of operations and comprehensive income (loss).

In the six months ended June 30, 2022 and 2021, the losses and earnings attributable to the investment were $353,315 and $28,447, respectively.

(2) Ships includes our 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 and $10,065 for the three months ended March 31, 2022 and December 31, 2021, respectively, are reported in income (loss) from equity method investments in the consolidated statements of operations and comprehensive income (loss).

The earnings attributable to the investment of $17,069 and $13,555 for the three months ended June 30, 2022 and March 31, 2022, respectively, are reported in (Loss) income from equity method investments in the consolidated statements of operations and comprehensive income (loss).

For the six months ended June 30, 2022 and 2021, the earnings attributable to the investment were $30,623 and $10,494, respectively.

(3) Consolidation and Other adjust for the inclusion of our effective share of revenues, expenses and operating margin attributable to 50% ownership of CELSEPAR and Hilli Common Units in our segment measure and exclusion of the unrealized mark-to-market gain or loss on derivative instruments.

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Three Months Ended,

(in thousands of $) March 31, 2022 December 31, 2021 Change March 31, 2021 Change

(in thousands of $) June 30, 2022 March 31, 2022 Change

Total revenues $ 543,455 $ 480,349 $ 63,106

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Segment Operating Margin $ 237,712 $ 211,083 $ 26,629

Six Months Ended,

(in thousands of $) June 30, 2022 June 30, 2021 Change

Total revenues $ 1,023,804 $ 327,232 $ 696,572

Cost of sales 507,480 200,122 307,358

Vessel operating expenses 7,747 — 7,747

Operations and maintenance 59,782 39,895 19,887

Segment Operating Margin $ 448,795 $ 87,215 $ 361,580

Total revenue

Total revenue for the Terminals and Infrastructure Segment decreased $209,421 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

The decrease was primarily driven by lower revenue from LNG cargo sales to third parties.

Revenue from cargo sales was $285,171 for the three months ended March 31, 2022 and $422,880 for the three months ended December 31, 2021.

Our revenue was also negatively impacted by decreases to the Henry Hub index in the first quarter.

Our contracts with customers in this segment typically include a portion of pricing based on the Henry Hub index, and the average Henry Hub index pricing used to invoice our customers decreased by 15% for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

Total revenue for the Terminals and Infrastructure Segment increased $334,665 for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

We recognized revenue for LNG cargos sold to third parties and our share of revenue from our investment in CELSEPAR during the first quarter of 2022, totaling $348,560.

We did not have any cargo sales transactions in the first quarter of 2021, and the acquisition of our investment in CELSEPAR in the Mergers occurred subsequent to March 31, 2021.

Accordingly, the increased revenue was primarily driven by these transactions.

The following table summarizes the volumes delivered, exclusive of LNG cargo volumes sold to third parties, in the three months ended March 31, 2022 as compared to the three months ended December 31, 2021 and the three months ended March 31, 2021:

Total revenue for the Terminals and Infrastructure Segment increased $63,106 for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

The increase was primarily driven by increased revenue from LNG cargo sales to third parties and increases to the Henry Hub index that forms a portion of the pricing to invoice most of our customers in this segment.

Revenue from cargo sales was $309,030 for the three months ended June 30, 2022 and $285,171 for the three months ended March 31, 2022.

Our revenue has been positively impacted by increases to the Henry Hub index during 2022, and the impact was more pronounced in the second quarter.

The average Henry Hub index pricing used to invoice our customers increased by 45% for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

Total revenue for the Terminals and Infrastructure Segment increased $696,572 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

The increase was primarily driven by increased revenue from LNG cargo sales to third parties, additional revenue from our investment in CELSEPAR and increases to the Henry Hub index that forms a portion of the pricing to invoice most of our customers in this segment.

Revenue from cargos sales was $594,201 for the six months ended June 30, 2022 as compared to $7,211 for the six months ended June 30, 2021 as we did not have any significant cargo sales transactions in the first and second quarters of 2021.

Our acquisition of our investment in CELSEPAR in the Mergers occurred on April 15, 2021, and as such, we have recognized additional revenue in the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

Finally, the average Henry Hub index pricing used to invoice our customers increased by 119% for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

The following tables summarize the volumes delivered, exclusive of LNG cargo volumes sold to third parties, in the three months ended June 30, 2022 as compared to the three months ended March 31, 2022, as well as the six months ended June 30, 2022 as compared to the six months ended June 30, 2021:

Three Months Ended

(in TBtu) March 31, 2022 December 31, 2021 Change March 31, 2021 Change

(in TBtu) June 30, 2022 March 31, 2022 Change

Old Harbour Facility 4.1 3.0 1.1

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Total volumes delivered in the current period 9.3 6.3 3.0

A summary of the impact to revenue from our operations at our Old Harbour Facility is as follows:

• Sales at the Old Harbour Facility decreased by $4,888 from $62,491 for the three months ended December 31, 2021 to $57,603 for the three months ended March 31, 2022.

The decrease in revenue from the Old Harbour Facility was due to revenue deferred for volumes delivered below the take-or-pay minimums in our contracts and a decrease in the Henry Hub index used to invoice our customers as compared to the three months ended December 31, 2021.

• Sales at the Old Harbour Facility increased by $6,065 from $51,538 for the three months ended March 31, 2021 to $57,603 for the three months ended March 31, 2022.

The increase in revenue from the Old Harbour Facility was due to an increase in the Henry Hub index used to invoice our customers as compared to the three months ended March 31, 2021, which was partially offset by a decrease in volumes delivered at the Old Harbour Power Plant.

• The Jamalco refinery experienced a fire in August 2021, and no gas volumes have been consumed by their boilers since this event.

Revenue from the delivery of power and steam from the CHP Plant decreased by $5,713 and $5,591 from the three months ended December 31, 2021 and March 31, 2021, respectively, to $1,651 for the three months ended March 31, 2022.

Revenue was also impacted by operations at our Montego Bay Facility.

Six Months Ended

(in TBtu) June 30, 2022 June 30, 2021 Change

Old Harbour Facility 7.1 9.4 (2.3)

Montego Bay Facility 2.2 4.1 (1.9)

San Juan Facility 4.1 7.7 (3.6)

Other 2.2 0.6 1.6

Total volumes delivered in the current period 15.6 21.8 (6.2)

Additional details of the change in volumes by location are as follows:

• Volumes delivered at the Old Harbour Facility increased for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022 due to an increase in volumes delivered at the Old Harbour Power Plant.

Decreased consumption at the CHP Plant also drove volume decreases at the Old Harbour Facility for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

• During the first quarter of 2022, no volumes were consumed by the Bogue Power Plant, leading to the significant decrease in volumes delivered at the Montego Bay Facility, due to the port authority at the Port of Montego Bay where our facility resides requiring a reconfiguration and partial relocation of our assets.

We expect this reconfiguration to be completed in the second quarter of 2022, and at that time, we will recommence deliveries to the Bogue Power Plant.

• As no volumes were delivered to the Bogue Power Plant, our revenue from the Montego Bay Facility decreased by $7,417 from $18,129 for the three months ended December 31, 2021 to $10,712 for the three months ended March 31, 2022.

Similarly, sales at the Montego Bay Facility decreased by $14,067 from $24,779 for the three months ended March 31, 2021 to $10,712 for the three months ended March 31, 2022.

This reconfiguration was completed in the second quarter of 2022, and at that time, we recommenced deliveries to the Bogue Power Plant.

• The San Juan Power Plant completed additional maintenance activities in the first quarter of 2022, leading to lower consumption of natural gas.

Sales at the San Juan Facility decreased by $3,959 from $14,953 for the three months ended December 31, 2021 to $10,994 for the three months ended March 31, 2022.

Sales at the San Juan Facility also decreased by $34,624 for the three months ended March 31, 2022.

Revenue from cargo sales was $285,171 for the three months ended March 31, 2022 as compared to $422,880 for the three months ended December 31, 2021.

For the three months ended March 31, 2021, we did not have any cargo sale transactions in the first quarter of 2021.

Subsequent to the acquisition of our interest in the Sergipe Facility as part of the Mergers, our share of revenue from our investment in CELSEPAR was $63,389 for the three months ended March 31, 2022 and $132,876 for the three months ended December 31, 2021, which was primarily comprised of fixed capacity payments received under CELSE's PPAs.

Revenue recognized from the operation of the Sergipe Power Plant was significantly increased in the fourth quarter of 2021 by emergency dispatch due to poor hydrological conditions in Brazil.

As hydrology conditions have improved in the first quarter of 2022, the Sergipe Power Plant has been dispatched less, reducing revenue from our share of our investment in CELSEPAR

The increase in volumes delivered at the San Juan Facility for the three months ended June 30, 2022 and the decrease in the six months ended June 30, 2022 were due to these additional maintenance activities.

Subsequent to the acquisition of our interest in the Sergipe Facility as part of the Mergers, our share of revenue from our investment in CELSEPAR was $43,576 for the three months ended June 30, 2022 and $63,389 for the three months ended March 31, 2022, which was primarily comprised of fixed capacity payments received under CELSE's PPAs.

As hydrology conditions have continued to improve in the second quarter of 2022, the Sergipe Power Plant was not dispatched in the second quarter of 2022, reducing revenue from our share of our investment in CELSEPAR.

Our share of revenue from our investment in CELSEPAR was $106,965 for the six months ended June 30, 2022 as compared to $31,769 for the six months ended June 30, 2021, which represents our share of revenue for the period after the Merger.

The increase was due the investment impacting our results for the full six months of 2022 as opposed to less than a full quarter of 2021 and revenue earned from dispatch of the Sergipe Power Plant in the first quarter of 2022.

Cost of sales

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Costs to convert natural gas to LNG, including labor, depreciation and other direct costs to operate our Miami Facility are also included in Cost of sales.

Cost of sales decreased $147,284 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

• The decrease was primarily due to lower cost and volume of LNG cargo sales in the market.

We recognized $86,462 during the three months ended March 31, 2022 to acquire cargos sold to third parties, as compared to $166,027 for the three months ended December 31, 2021.

Due to the significant increase in market pricing of LNG in the second half of 2021 and continued increase in the first quarter of 2022, we have optimized our supply portfolio to sell a portion of our committed cargos in the market.

LNG cargo sales in the market decreased by 6.6 TBtus from 16.3 TBtus for the three months ended December 31, 2021 to 9.7 TBtus for the three months ended March 31, 2022.

The weighted-average cost of LNG from the sale of a portion of our cargos also decreased from $10.20 per MMBtu for the three months ended December 31, 2021 to $8.81 per MMBtu for the three months ended March 31, 2022.

• During the first quarter of 2022, the Sergipe Power Plant was dispatched substantially less than in the fourth quarter of 2021 due to improved hydrology conditions in Brazil.

Our share of cost of sales from our investment in CELSEPAR, which was primarily comprised of LNG costs to fuel the power plant, was $24,742 for the three months ended March 31, 2022, as compared to $100,811 for the three months ended December 31, 2021

• Cost of LNG purchased from third parties for sale to our customers decreased $6,633 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

The decrease was primarily

attributable to a 3% decrease in volumes delivered compared to the three months ended December 31, 2021, and a slight decrease in LNG cost.

The weighted-average cost of LNG purchased from third parties decreased from $9.57 per MMBtu for the three months ended December 31, 2021 to $9.49 per MMBtu for the three months ended March 31, 2022.

Cost of sales increased $138,861 for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

• We recognized cost to acquire LNG cargos sold to third parties and our share of cost of sales from our investment in CELSEPAR during the first quarter of 2022, totaling $111,204.

We did not have any cargo sale transactions in the first quarter of 2021, and the acquisition of our investment in CELSEPAR in the Mergers occurred subsequent to March 31, 2021.

Cost of sales increased $36,416 for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

• The increase was primarily due to higher cost and volume of LNG cargo sales in the market.

We recognized $115,432 during the three months ended June 30, 2022 to acquire cargos sold to third parties, as compared to $86,462 for the three months ended March 31, 2022.

Due to the significant increase in market pricing of LNG in the second half of 2021 and continued increase in the first half of 2022, we have optimized our supply portfolio to sell a portion of our committed cargos in the market.

LNG cargo sales in the market increased by 0.5 TBtus for the three months ended June 30, 2022.

The weighted-average cost of LNG from the sale of a portion of our cargos also increased from $8.81 per MMBtu for the three months ended March 31, 2022 to $11.23 per MMBtu for the three months ended June 30, 2022.

• Cost of LNG purchased from third parties for sale to our customers increased $33,376 for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

The increase was primarily attributable to a 48% increase in volumes delivered compared to the three months ended March 31, 2022, and a slight increase in LNG cost.

The weighted-average cost of LNG purchased from third parties increased from $9.49 per MMBtu for the three months ended March 31, 2022 to $9.78 per MMBtu for the three months ended June 30, 2022.

• During the second quarter of 2022, the Sergipe Power Plant was dispatched substantially less than in the first quarter of 2022 due to improved hydrology conditions in Brazil.

Our share of cost of sales from our investment in CELSEPAR, which was primarily comprised of LNG costs to fuel the power plant, was $1,794 for the three months ended June 30, 2022, as compared to $24,742 for the three months ended March 31, 2022.

Cost of sales increased $307,358 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

• We recognized cost to acquire LNG cargos sold to third parties and our share of cost of sales from our investment in CELSEPAR during the first and second quarters of 2022, totaling $228,429.

We did not have any significant cargo sale transactions in the first half of 2021, and the acquisition of our investment in CELSEPAR in the

Mergers occurred subsequent to March 31, 2021.

Accordingly, the increased costs of sales was primarily driven by these transactions.

• Cost of LNG purchased from third parties for sale to our customers decreased $5,017 for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

We delivered 41% less volumes to our terminal customers in the current quarter as compared to the three months ended March 31, 2021.

Our cost of LNG was significantly higher in the current quarter, and as such, the decrease of cost of sales to deliver to our terminal customers did not fully correspond with the decrease in volumes.

The weighted-average cost of LNG purchased from third parties increased from $6.17 per MMBtu for the three months ended March 31, 2021 to $9.49 per MMBtu for the three months ended March 31, 2022.

The weighted-average cost of our LNG inventory balance to be used in our operations as of March 31, 2022 and December 31, 2021 was $8.21 per MMBtu and $9.51 per MMBtu, respectively.

• Cost of LNG purchased from third parties for sale to our customers increased $18,100 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

We delivered 10% less volumes to our terminal customers in the current period as compared to the six months ended June 30, 2021.

Our cost of LNG was significantly higher in the current period, and as such, the increase of cost of sales to deliver to our terminal customers did not fully correspond with the decrease in volumes.

The weighted-average cost of LNG purchased from third parties increased from $6.37 per MMBtu for the six months ended June 30, 2021 to $9.66 per MMBtu for the six months ended June 30, 2022.

• We incurred additional costs associated with the required reconfiguration and partial relocation of our assets at the Port of Montego Bay of $22,165 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2022.

• Vessel costs increased $39,544 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 due to additional vessels used in our expanded operations.

The weighted-average cost of our LNG inventory balance to be used in our operations as of June 30, 2022 and December 31, 2021 was $12.32 per MMBtu and $9.51 per MMBtu, respectively.

Vessel operating expenses

Vessel operating expenses include direct costs associated with operating a vessel, and these costs are typically included in the Ships segment.

Vessel operating expenses was substantially flat for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

Vessel operating expenses increased $7,747 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 due to vessels included in this segment that are being chartered to third parties during periods when the vessels are not being used in our downstream terminal operations.

Operations and maintenance

Operations and maintenance includes costs of operating our facilities, exclusive of costs to convert that are reflected in Cost of sales.

Operations and maintenance increased $5,084 and $13,990 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021 and March 31, 2021, respectively .

• The increase for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021 and March 31, 2021 was primarily attributable to higher logistics costs associated with our ISO container distribution system.

In the first quarter of 2022, we continued to source LNG from our Miami Facility to service industrial end users in Jamaica due to the reconfiguration and partial relocation of our assets at the Port of Montego Bay, and we incurred additional costs to distribute LNG to customers via our ISO container distribution system.

• Additionally, the increased costs in the first quarter of 2022 when compared to the first quarter of 2021 was due to the inclusion of our share of Operations and maintenance from our investment in CELSEPAR of $7,074 for the three months ended March 31, 2022, which was primarily comprised of costs related to the operation and services agreement for the Nanook , insurance costs and costs for connecting to the transmission system.

Operations and maintenance was substantially flat for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

Operations and maintenance increased $19,887 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 .

• The increase for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 was primarily attributable to higher logistics costs associated with our ISO container distribution system.

In the the six months ended June 30, 2022, we continued to source LNG from our Miami Facility to service industrial end users in Jamaica due to the reconfiguration and partial relocation of our assets at the Port of Montego Bay, and we incurred additional costs to distribute LNG to customers via our ISO container distribution system.

• Additionally, Operations and maintenance increased $11,045 due to the inclusion of our share of Operations and maintenance from our investment in CELSEPAR from $5,079 for the six months ended June 30, 2021 to $16,124 for the six months ended June 30, 2022, which represents the costs for the period after the Merger.

These costs are primarily related to the operation and services agreement for the Nanook , insurance costs and costs for connecting to the transmission system.

Ships Segment

Three Months Ended,

(in thousands of $) March 31, 2022 December 31, 2021 Change March 31, 2021 Change

(in thousands of $) June 30, 2022 March 31, 2022 Change

Total revenues $ 111,024 $ 114,942 $ (3,918)

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Segment Operating Margin $ 89,736 $ 89,000 $ 736

Prior to the completion of the Mergers, we reported our results of operations in a single segment;

all the assets and operations that comprise the Ships segment were acquired in the Mergers, and as such, there are no results of operations prior to the completion of the Mergers during the second quarter of 2021.

Six Months Ended,

(in thousands of $) June 30, 2022 June 30, 2021 Change

Total revenues $ 225,966 $ 95,762 $ 130,204

Cost of sales — — —

Vessel operating expenses 47,230 20,175 27,055

Operations and maintenance — — —

Segment Operating Margin $ 178,736 $ 75,587 $ 103,149

Revenue in the Ships segment is comprised of operating lease revenue under time charters, fees for repositioning vessels as well as the reimbursement of certain vessel operating costs.

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We include the interest income earned under sales-type leases as revenue as amounts earned under chartering and operating service agreements represent our ongoing ordinary business operations.

At the completion of the Mergers, five of the FSRUs and two LNGCs were on hire under long-term charter agreements, and one LNGCs, the Grand , was operating in the spot market.

At the completion of the Mergers, five of the FSRUs and two LNG carriers were on hire under long-term charter agreements, and one LNG carriers, the Grand , was operating in the spot market.

In the third quarter, the Grand , began to be utilized in our terminal and logistics operations, and as such, the results of operations of the Grand are included in the Terminals and Infrastructure segment from the third quarter of 2021 onward.

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Total revenue

Total revenue for the Ships segment decreased $2,854 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

The decrease was primarily driven by lower revenue as a result of a change in on-hire days quarter over quarter.

The calendar quarter is two days shorter in the first quarter, and as such, revenue decreased slightly due to lower number of commercial on-hire days.

Total revenue for the Ships segment decreased $3,918 for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

The decrease was primarily driven by lower revenue as a result of one FSRU being off-hire as the vessel transitions between charters;

the new charter is expected to commence prior to the end of 2022.

The decrease was partially offset by improved results from one of our vessels in the Cool Pool.

Total revenue for the Ships segment increased $130,204 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

We completed the Mergers, including all of the vessels comprising the Ships segment, on April 15, 2021, and the increase in revenue is due to the inclusion of the Ships segment in our results of operations for a full six months as opposed to less than a full quarter in the prior year comparable period.

Vessel operating expenses

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To the extent that these costs are a fixed amount specified in the charter, which is not dependent upon redelivery location, the estimated voyage expenses are recognized over the term of the time charter.

Vessel operating expenses increased $2,942 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021, primarily due to increased customs claims in Jordan where one of our FSRUs operates.

As all operations of the Ships segment were acquired in the Mergers, there were no comparable transactions for the three months ended March 31, 2021.

Vessel operating expenses decreased $4,654 for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022, primarily due to customs claims in Jordan where one of our FSRUs operates recognized in the first quarter of 2022 that did not recur in the second quarter of 2022.

Vessel operating expenses increased $27,055 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.We completed the Mergers, including all of the vessels comprising the Ships segment, on April 15, 2021, and the increase in vessel operating expenses is due to the inclusion of the Ships segment in our results of operations for a full six months as opposed to less than a full quarter in the prior year comparable period.

Other operating results

Three Months Ended,

(in thousands of $) March 31, 2022 December 31, 2021 Change March 31, 2021 Change

Three Months Ended, Six Months Ended,

(in thousands of $) June 30, 2022 March 31, 2022 Change June 30, 2022 June 30, 2021 Change

Selling, general and administrative $ 50,310 $ 48,041 $ 2,269 $ 98,351 $ 78,152 $ 20,199

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Depreciation and amortization 36,356 34,290 2,066 70,646 36,886 33,760

Asset impairment expense 48,109 — 48,109 48,109 — 48,109

Total operating expenses 139,641 84,232 55,409 223,873 155,754 68,119

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Other (income), net (22,102) (19,725) (2,377) (41,827) (8,058) (33,769)

Loss on extinguishment of debt, net — 10,975 (10,975) — —

Net income (loss) before income from equity method investments and income taxes 107,957 141,265 (33,308) 249,222 (76,652) 325,874

Income (loss) from equity method investments 50,235 (8,515) 58,750 — 50,235

(Loss) income from equity method investments (372,927) 50,235 (423,162) (322,692) 38,941 (361,633)

Tax (benefit) provision (86,539) (49,681) (36,858) (136,220) 3,532 (139,752)

Net income (loss) $ 241,181 $ 151,723 $ 89,458 $ (39,509) $ 280,690

Net (loss) income $ (178,431) $ 241,181 $ (419,612) $ 62,750 $ (41,243) $ 103,993

Selling, general and administrative

Selling, general and administrative includes compensation expenses for our corporate employees, employee travel costs, insurance, professional fees for our advisors and screening costs associated with development activities for projects that are in initial stages and development is not yet probable.

Selling, general and administrative decreased $26,886 for the three months ended March 31, 2022, as compared to the three months ended December 31, 2021.

The decrease was primarily attributable to a decrease in share-based compensation expense.

In the fourth quarter of 2021, due to the significant impact of cargo sales on our results of operations, we determined that the performance metric associated with our performance share units granted in 2020 was probable of vesting, and we recognized $30,467 of share-based compensation expense.

We also have incurred higher payroll costs, insurance expenses, management fees and professional fees due to the continue expansion of our operations as compared to the fourth quarter of 2021.

Selling, general and administrative increased $14,424 for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021.

The increase was primarily attributable to higher payroll, professional fees and managements fees associated with the continued expansion of our operations.

Selling, general and administrative increased $2,269 for the three months ended June 30, 2022, as compared to the three months ended March 31, 2022.

The increase was primarily attributable to higher payroll costs, screening costs and professional fees due to the continued expansion of our operations as compared to the first quarter of 2022.

Selling, general and administrative increased $20,199 for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021.

The increase was primarily attributable to higher payroll and professional fees associated with the continued expansion of our operations.

Transaction and integration costs

For the three months ended March 31, 2022, we incurred $1,901 for transaction and integration costs, as compared to $2,107 and $11,564 for the three months ended December 31, 2021 and March 31, 2021, respectively.

For the three months ended March 31, 2021, we incurred transaction and integration costs were incurred in connection with the Mergers, which consisted primarily of financial advisory, legal, accounting and consulting costs.

Our integration costs decreased in both the fourth quarter of 2021 and the first quarter of 2022 as the integration of GMLP and Hygo has progressed since the acquisition date.

For the three months ended June 30, 2022, we incurred $4,866 for transaction and integration costs, as compared to $1,901 for the three months ended March 31, 2022.

For the three months ended June 30, 2022, we incurred transaction and integration costs in connection with the Sergipe Sale, which consisted primarily of financial advisory, legal accounting and consulting costs.

For the six months ended June 30, 2022, we incurred $6,767 for transaction and integration costs, as compared to $40,716 for the six months ended June 30, 2021.

For the six months ended June 30, 2021, we incurred in transaction and integration costs in connection with the Sergipe Sale, which consisted primarily of financial advisory, legal accounting and consulting costs and to a lesser extent integration costs from the Mergers as the integration of GMLP and Hygo has progressed since the acquisition date.

Depreciation and amortization

Depreciation and amortization increased $3,993 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

For the three months ended March 31, 2022, we incurred higher amortization of favorable and unfavorable contracts acquired in the Mergers as the amortization of certain unfavorable contract liabilities (reduction to expense) was completed in the fourth quarter of 2021.

Depreciation and amortization increased $24,400 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

Depreciation and amortization increased $2,066 for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

For the three months ended June 30, 2022, we incurred higher amortization of favorable and unfavorable contracts and permits.

Depreciation and amortization increased $33,760 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

The increase was primarily due to the following:

• Subsequent to the completion of the Mergers, our results of operations include depreciation expense primarily for the vessels acquired.

We recognized $14,070 of incremental depreciation expense for the acquired vessels during the three months ended March 31, 2022

• Amortization of the value recorded for favorable and unfavorable contracts acquired in the Mergers of $8,346 for the three months ended March 31, 2022.

• Subsequent to the completion of the Mergers, our results of operations include depreciation expense primarily for the vessels acquired for a full six months as opposed to less than a full quarter in the prior year comparable period.

We recognized $18,483 of incremental depreciation expense for the acquired vessels during the six months ended June 30, 2022.

• Amortization of the value recorded for favorable and unfavorable contracts acquired in the Mergers of an additional $11,815 for the six months ended June 30, 2022.

Asset impairment expense

As a result of the Hygo Merger, we recognized long-lived assets associated the expansion of the Sergipe Power Plant.

In the second quarter of 2022, we recognized asset impairment expense of $48,109, as the fair value of these assets was less than the carrying value and the asset group was held for sale.

Interest expense

Interest expense decreased by $1,651 for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

The decrease was primarily due to the termination of the sale leaseback agreement of the Eskimo assumed in the Mergers.

Interest expense increased by $26,236 for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021.

The increase was primarily due to an increase in total principal outstanding due to the issuance of the 2026 Notes in April 2021, draws on the Revolving Facility, borrowings under the Vessel Term Loan Facility and the South Power 2029 Bonds (all defined in our Annual Report);

principal balance on outstanding facilities was $3,978,250 as of March 31, 2022 as compared to total outstanding debt of $1,250,000 as of March 31, 2021.

In conjunction with the Mergers, we assumed outstanding debentures issued by a subsidiary of Hygo and the outstanding debt of variable interest entities (“VIEs”) that are now consolidated in our financial statements, totaling $389,946 as of December 31, 2021.

Although we have no control over the funding arrangements of these entities, we are the primary beneficiary of these VIEs and therefore these loan facilities are presented as part of the condensed consolidated financial statements.

For the three months ended March 31, 2022, we recognized additional interest expense attributable to assumed debt of $3,378.

Other (income) expense, net

Other (income) expense, net increased by $16,033 and $19,121 for the three months ended March 31, 2022, as compared to the three months ended December 31, 2021 and March 31, 2021, respectively.

Income recognized in the first quarter of 2022 was primarily comprised of the following :

• Changes in the fair value of the cross-currency interest rate swap and the interest rate swaps acquired in connection with the Mergers, resulted in income of $24,409 for the three months ended March 31, 2022.

• Changes in the fair value adjustments for the equity agreement and derivatives related to contingent payments due to sellers in asset acquisitions resulted in additional expense of $2,765 for the three months ended March 31, 2022.

Loss on extinguishment of debt, net

Loss on extinguishment of debt for the three months ended December 31, 2021 was $10,975.

In November 2021, we exercised our option to terminate the sale leaseback agreement of the Eskimo assumed in the Mergers in exchange for a total payment of $190,518.

The counterparty to this sale leaseback arrangement (“Eskimo SPV”) had been consolidated in our financial statements subsequent to the Mergers.

In connection with the termination of this financing arrangement, we recognized a loss on extinguishment of debt based on the difference between the repurchase price under the sale leaseback arrangement and the carrying value of the net assets of the Eskimo SPV upon deconsolidation.

There were no comparable transactions for the three months ended March 31, 2022 or March 31, 2021.

Interest expense increased by $2,924 for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.

The increase was primarily due an increase in total principal outstanding due to draws on the Revolving Facility (defined in our Annual Report) and borrowings under the South Power 2029 Bonds (defined below);

principal balance on outstanding facilities was $4,191,026 as of June 30, 2022 as compared to total outstanding debt of $3,978,250 as of March 31, 2022.

Interest expense increased by $42,594 for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021.

The increase was primarily due to an increase in total principal outstanding due to draws on the Revolving Facility, borrowings under the Vessel Term Loan Facility (defined in our Annual Report) and the South Power 2029 Bonds, all occurring after June 30, 2022;

principal balance on outstanding facilities was $4,191,026 as of June 30, 2022 as compared to total outstanding debt of $3,527,297 as of June 30, 2021.

Interest expense also increased due to debt assumed in the Mergers, which were completed on April 15, 2021.

Other (income), net

Other (income), net was $(22,102) and $(19,725) for the three months ended June 30, 2022 and March 31, 2022, respectively.

Other (income), net was $(41,827) and $(8,058) for the six months ended June 30, 2022 and June 30, 2021, respectively.

Other (income) recognized in the three and six months ended June 30, 2022 was primarily comprised of the following:

• Mark-to-market gains on the foreign currency forward purchase of $17,471 in both the three and six months ended June 30, 2022.

• Additionally, changes in the fair value of the cross-currency interest rate swap and the interest rate swap acquired in connection with the Mergers offset by interest expense on the interest rate swap acquired in connection with the Mergers, resulted in income of $2,213 and $24,270 for the three and six months ended June 30, 2022.

Tax provision

We recognized a tax benefit for the three months ended March 31, 2022 of $49,681 compared to a tax provision of $5,403 for the three months ended December 31, 2021 and a tax benefit of $877 for the three months ended March 31, 2021.

The increase to the tax benefit and associated decrease to the effective tax rate for the three months ended March 31, 2022 was primarily driven by the remeasurement of a deferred income tax liability in conjunction with an internal reorganization.

We recognized a tax benefit for the three months ended June 30, 2022 of $86,539 compared to a tax benefit of $49,681 for the three months ended March 31, 2022.

We recognized a tax benefit for the six months ended June 30, 2022 of $136,220 compared to a tax provision of $3,532 for the six months ended June 30, 2021.

The tax benefits recognized in the three and six months ended June 30, 2022 were primarily driven by the remeasurement of a deferred income tax liability in conjunction with an internal reorganization and the impairment of our investment in CELSEPAR.

Our 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 resulting in a discrete tax benefit of $76,460 recognized in the first quarter of 2022.

This increase in benefit for the three months ended March 31, 2022 was partially offset by an increase in pretax income for certain profitable operations, including GMLP and Hygo, for the three months ended March 31, 2022.

The Company has not recorded any material changes in liabilities for uncertain tax positions as of March 31, 2022.

Income from equity method investments

We recognized income (loss) from our investments in Hilli and CELSEPAR of $50,235 for the three months ended March 31, 2022 and $(8,515) for the three months ended December 31, 2021, respectively.

Our share of earnings from CELSEPAR was significantly impacted by a foreign currency remeasurement gain of $42,466, net of applicable statutory rate for the three months ended March 31, 2022 as a result of the remeasurement of the Nanook finance lease obligation, as compared to a remeasurement loss of $(6,788), net of applicable statutory rate for the three months ended December 31, 2021.

the investment was previously held by a subsidiary domiciled in Brazil resulting in a discrete tax

benefit of $76,460 recognized in the first quarter of 2022.

Additionally, in the second quarter of 2022, we recognized an other-than-temporary impairment ("OTTI") on the value of this investment, resulting in a further discrete benefit of $100,627.

This increase in tax benefit for the three and six months ended June 30, 2022 was partially offset by an increase in pretax income for certain profitable operations, including GMLP and Hygo.

The Company has not recorded any material changes in liabilities for uncertain tax positions in the second quarter of 2022.

(Loss) income from equity method investments

We recognized loss and income from our investments in Hilli and CELSEPAR of $372,927 and $50,235 for the three months ended June 30, 2022 and March 31, 2022, respectively.

In connection with the Sergipe Sale, we recognized an other than temporary impairment of the investment in CELSEPAR of $345,447.

Our share of earnings from CELSEPAR was also significantly impacted by a foreign currency remeasurement loss of $28,788 for the three months ended June 30, 2022 as a result of the remeasurement of the Nanook finance lease obligation, as compared to a remeasurement gain of $42,466 for the three months ended March 31, 2022.

We recognized loss from our investments in Hilli and CELSEPAR of $322,692 for the six months ended June 30, 2022.

For the six months ended June 30, 2021, during the period after the completion of the Mergers, we recognized income from our investments in Hilli and CELSEPAR of $38,941.

In connection with the Sergipe Purchase and Sale, we recognized an other than temporary impairment of the investment in CELSEPAR of $345,447.

Our share of earnings from CELSEPAR was significantly impacted by a foreign currency remeasurement gain of $13,678 for the six months ended June 30, 2022 as a result of the remeasurement of the Nanook finance lease obligation, as compared to a remeasurement gain of $25,776 during the period after the Mergers for the six months ended June 30, 2021.

Factors Impacting Comparability of Our Financial Results

Our historical results of operations and cash flows are not indicative of results of operations and cash flows to be expected in the future, principally for the following reasons:

• Our historical financial results include the results of operations of Hygo and GMLP only since the completion of the Mergers in April 2021.

Upon completion of the Mergers, we acquired a fleet of seven FSRUs, six LNG carriers and an interest in a floating liquefaction vessel.

We also acquired a 50% interest in the Sergipe Facility and the Sergipe Power Plant, as well as the Barcarena Facility and Barcarena Power Plant and the Santa Catarina Facility that are currently in development.

The results of operations of Hygo and GMLP began to be included in our financial statements upon the closing of the acquisitions on April 15, 2021.

Our results of operations after the acquisitions also included transaction and integration costs associated with these acquisitions, some of which would not be expected in future periods.

Our future results of operations may continue to be impacted by costs to integrate the operations of Hygo and GMLP, including

costs to exit or modify transition service agreements or vessel management agreements, all of which may be significant.

• Our historical financial results do not include significant projects that have recently been completed or are near completion.

Our results of operations for the three months ended March 31, 2022 include our Montego Bay Facility, Old Harbour Facility, San Juan Facility, certain industrial end-users and our Miami Facility.

We recently placed a portion of our La Paz Facility into service, and in the fourth quarter of 2021, our revenue and results of operations began to be impacted by operations in Mexico.

We are continuing to develop of our La Paz Power Plant and our Puerto Sandino Facility, and our current results do not include revenue and operating results from these projects.

Our current results also exclude other developments, including the Suape Facility, Barcarena Facility, Santa Catarina Facility and Ireland Facility.

• Our historical financial results do not reflect the recently announced Sergipe Sale and Vessel Financing Transaction.

After the completion of the Sergipe Sale expected in the fourth quarter of 2022, we will no longer include the results of our equity method investment in CELSEPAR in our financial statements.

For the three and six months ended June 30, 2022, we recognized losses of $389,996 and $353,315 , respectively, in Loss (income) from equity method investments in our condensed consolidated statements of operations and comprehensive income (loss).

The results of operations of the Sergipe Power Plant have also been included in our Terminal and Infrastructure segment results, contributing segment operation margin of $32,732 and $64,305 for the three and six months ended June 30, 2022, respectively.

Finally, we recognized an other than temporary impairment on our investment in CELSEPAR in the second quarter of 2022 of $345,447, which would not recur after the Sergipe Sale is completed.

We expect to complete the Vessel Financing Transaction in the third quarter of 2022.

Upon the completion of this transaction, the majority of proceeds received will be reflected as additional financing on our condensed consolidated balance sheet, increasing our interest expense in future periods.

• Our historical financial results do not reflect new LNG supply agreements, as well as our Fast LNG solution that will lower the cost of our LNG supply.

We currently purchase the majority of our supply of LNG from third parties, sourcing approximately 94% of our LNG volumes from third parties for the three months ended March 31, 2022.

We currently purchase the majority of our supply of LNG from third parties, sourcing approximately 96% of our LNG volumes from third parties for the six months ended June 30, 2022.

We have entered into LNG supply agreements at a price indexed to Henry Hub through 2030, resulting in expected pricing below the pricing in our previous long-term supply agreement.

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Due to this significant increase in market pricing of LNG, we have optimized our supply portfolio to sell a portion of our committed cargos in the market with delivery throughout 2022, and these cargo sales are expected to increase our 2022 revenues and results of operations .

• Our historical financial results do not include significant projects that are near completion or in development.

Our results of operations for the three and six months ended June 30, 2022 include our Montego Bay Facility, Old Harbour Facility, San Juan Facility, certain industrial end-users and our Miami Facility.

We recently placed a portion of our La Paz Facility into service, and in the fourth quarter of 2021, our revenue and results of operations began to be impacted by operations in Mexico.

We are continuing to develop of our La Paz Power Plant and our Puerto Sandino Facility, and our current results do not include revenue and operating results from these projects.

Our current results also exclude other developments, including the Barcarena Facility, Santa Catarina Facility and Ireland Facility.

Liquidity and Capital Resources

We believe we will have sufficient liquidity from proceeds from recent borrowings, access to additional capital sources and cash flow from operations to fund our capital expenditures and working capital needs for the next 12 months.

We expect to fund our current operations and continued development of additional facilities through cash on hand, borrowings under our debt facilities and cash generated from operations.

We expect to fund our current operations and continued development of additional facilities through cash on hand, borrowings under our debt facilities, the completion of the Sergipe Sale, the completion of the Vessel Financing Transaction and cash generated from operations.

We may also opportunistically elect to generate additional liquidity through future debt or equity issuances and asset sales to fund developments and transactions.

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we also entered into the $200,000 Revolving Facility that has a term of approximately five years.

in February 2022, we expanded capacity under the Revolving Facility to $315,000.

In February and May 2022, we amended the Revolving Facility to increase the borrowing capacity by $115,000 and $125,000 , respectively, for a total capacity under the Revolving Facility of $440,000.

• In August 2021, we entered into the CHP Facility and initially drew $100,000, which may be increased to $285,000.

In January 2022, we agreed to rescind the CHP Facility and entered into an agreement for the issuance of secured bonds.

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.

Through the first quarter of 2022, we have received proceeds of $175,783 from the issuance of South Power 2029 Bonds.

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 (defined below) .

Through June 30, 2022, we have received proceeds of $221,845 from the issuance of South Power 2029 Bonds.

• In September 2021, Golar Partners Operating LLC, our indirect subsidiary, closed on the Vessel Term Loan Facility.

Under this facility, we borrowed an initial amount of $430,000, which may be increased to $725,000, subject to satisfaction of certain conditions including the provision of security in relation to additional vessels.

We have assumed total committed expenditures for all completed and existing projects to be approximately $2,080 million, with approximately $1,584 million having already been spent through March 31, 2022.

This estimate represents the committed expenditures for our Fast LNG project, as well as committed expenditures necessary to complete the La Paz Facility, Puerto Sandino Facility, the Suape Facility, the Barcarena Facility, Santa Catarina Facility and the Sri Lanka Facility.

We expect to be able to fund all such committed projects with a combination of cash on hand, cash flows from operations and proceeds from the South Power 2029 Bonds (defined below).

We have assumed total committed expenditures for all completed and existing projects to be approximately $2,057 million, with approximately $1,727 million having already been spent through June 30, 2022.

This estimate represents the committed expenditures for our Fast LNG project, as well as committed expenditures necessary to complete the La Paz Facility, Puerto Sandino Facility, the Barcarena Facility, Santa Catarina Facility and the Sri Lanka Facility.

We expect to be able to fund all such committed projects with a combination of cash on hand, cash flows from operations and proceeds from the South Power 2029 Bonds.

We will also expect to fund future Fast LNG development with proceeds received from the Sergipe Sale and Vessel Financing Transaction.

We may also enter into other financing arrangements to generate proceeds to fund our developments.

As of March 31, 2022, we have spent approximately $128 million to develop the Pennsylvania Facility.

As of June 30, 2022, we have spent approximately $128 million to develop the Pennsylvania Facility.

Approximately $22 million of construction and development costs have been expensed as we have not issued a final notice to proceed to our engineering, procurement and construction contractors.

Cost for land, as well as engineering and equipment that could be deployed to other facilities and associated financing costs of approximately $106 million, has been capitalized, and to date, we have repurposed approximately $17 million of engineering and equipment to our Fast LNG project.

Our current air permit required to construct the Pennsylvania Facility is expected to expire in July 2022.

We intend to apply for an updated air permit for the Pennsylvania Facility with the aim of obtaining this permit to coincide with the commencement of construction activities.

We intend to apply for updated permits for the Pennsylvania Facility with the aim of obtaining these permits to coincide with the commencement of construction activities.

Contractual Obligations

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The following table summarizes certain contractual obligations in place as of December 31, 2021.

There were no material changes to our contractual obligations in the first quarter 2022.

(in thousands) Total Year 1 Years 2 to 3 Year 4 to 5 More than

There were no significant changes to our contractual obligations in the first half of 2022.

(in thousands of $) Total Year 1 Years 2 to 3 Year 4 to 5 More than

Long-term debt obligations $ 4,936,353 $ 305,575 $ 878,471 $ 3,341,677 $ 410,630

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We have secured supply of LNG for approximately 100% of our expected needs for our Montego Bay Facility, Old Harbour Facility, San Juan Facility, La Paz Facility and Puerto Sandino Facility for the next six years.

We have construction purchase commitments in connection with our development projects, including the La Paz Facility, Puerto Sandino Facility, Suape Facility, Barcarena Facility, Santa Catarina Facility, as well as our Fast LNG solution.

We have construction purchase commitments in connection with our development projects, including the La Paz Facility, Puerto Sandino Facility, Barcarena Facility, Santa Catarina Facility, as well as our Fast LNG solution.

Commitments included in the table above include commitments under engineering, procurement and construction contracts where a notice to proceed has been issued.

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Future minimum lease payments under non-cancellable lease agreements, inclusive of fixed lease payments for renewal periods we are reasonably certain will be exercised, are included in the above table.

Fixed lease payments for

short-term leases are also included in the table above.

Fixed lease payments for short-term leases are also included in the table above.

Our lease obligations are primarily related to LNG vessel time charters, marine port leases, ISO tank leases, office space and a land lease.

As of December 31, 2021, the Company had seven vessels under time charter leases with remaining non-cancellable terms ranging from one month to ten years.

As of December 31, 2021, we had seven vessels under time charter leases with remaining non-cancellable terms ranging from one month to ten years.

The lease commitments in the table above include only the lease component of these arrangements due over the non-cancellable term and does not include any operating services.

The Company has executed a lease for an LNG carrier that has not commenced as of December 31, 2021, which has a noncancelable terms of seven years and includes fixed payments of approximately $198,100;

We have executed a lease for an LNG carrier that has not commenced as of December 31, 2021, which has a noncancelable terms of seven years and includes fixed payments of approximately $198,100;

these payments are not included in the table above.

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Office space includes space shared with affiliated companies in New York, as well as offices in Miami, New Orleans, and Rio de Janeiro, which have lease terms between three to seven years.

The following table summarizes the changes to our cash flows for the three months ended March 30, 2022 and March 31, 2021, respectively :

Three Months Ended March 31,

(in thousands) 2022 2021 Change

The following table summarizes the changes to our cash flows for the six months ended June 30, 2022 and June 30, 2021, respectively :

Six Months Ended June 30,

(in thousands of $) 2022 2021 Change

Cash flows from:

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Net (decrease) in cash, cash equivalents, and restricted cash $ (44,121) $ (397,701) $ 353,580

Cash provided by operating activities

Our cash flow provided by operating activities was $114,382 for the three months ended March 31, 2022, which increased by $226,368 from cash used in operating activities of $111,896 for the three months ended March 31, 2021.

Our net income for the three months ended March 31, 2022, when adjusted for non-cash items, increased by $180,828 from the three months ended March 31, 2021.

Changes in working capital accounts, primarily increases in accounts payable and accrued liabilities, also contributed to additional cash provided by operating activities.

Cash provided by (used in) operating activities

Our cash flow provided by (used in) operating activities was $170,933 for the six months ended June 30, 2022, which increased by $282,285 from cash used in operating activities of $(111,352) for the six months ended June 30, 2021.

Our net income for the six months ended June 30, 2022, when adjusted for non-cash items, increased by $366,338 from the six months ended June 30, 2021.

Changes in working capital accounts, primarily increases in accounts payable and accrued liabilities, partially offset the additional net income in 2022.

Cash (used in) investing activities

Our cash flow used in investing activities was $189,221 for the three months ended March 31, 2022, which increased by $98,964 from cash used in investing activities of $90,257 for the three months ended March 31, 2021.

Cash outflows for investing activities during the three months ended March 31, 2022 were also used for continued development of our Fast LNG solution, Santa Catarina Facility, Barcarena Facility, as well as expenditures to complete our La Paz Facility and Puerto Sandino Facility.

Cash outflows for investing activities during the three months ended March 31, 2021 were primarily used for development projects in Nicaragua and Mexico.

Our cash flow (used in) investing activities was $(441,708) for the six months ended June 30, 2022, which decreased by $1,389,225 from cash used in investing activities of $(1,830,933) for the six months ended June 30, 2021.

Cash outflows for investing activities during the six months ended June 30, 2022 were used for continued development of our Fast LNG solution, Santa Catarina Facility, Barcarena Facility, as well as expenditures to complete our La Paz Facility and Puerto Sandino Facility.

Cash used for the Mergers, net of cash acquired was $1,586,042 for the six months ended June 30, 2021.

Cash outflows for investing activities during the six months ended June 30, 2021 were also used for continued development of the Puerto Sandino Facility, Barcarena Facility, Santa Catarina Facility, as well as our Fast LNG solution.

Cash provided by financing activities

Our cash flow provided by financing activities was $36,836 for the three months ended March 31, 2022, which increased by $84,727 from cash used in financing activities of $47,891 for the three months ended March 31, 2021.

Cash provided by financing activities during the three months ended March 31, 2022 was due to proceeds from issuance of debt of $200,836, offset by repayments of debt of $123,669 and payment of dividends of $23,773.

Cash flow used in financing activities during the three months ended March 31, 2021 was due to payments of $29,564 related to tax withholdings for share-based compensation, as well as dividends paid of $17,657.

Our cash flow provided by financing activities was $226,654 for the six months ended June 30, 2022, which decreased by $1,317,930 from cash used in financing activities of $1,544,584 for the six months ended June 30, 2021.

Cash provided by financing activities during the six months ended June 30, 2022 was due to proceeds from issuance of debt of $437,917, offset by repayments of debt of $146,030 and payment of dividends of $47,374.

Cash provided by financing activities during the six months ended June 30, 2021 was due to proceeds received from the borrowings under the 2026 Notes of $1,500,000 and the draw of $152,500 on the Revolving Facility.

The proceeds received were further offset by financing fees paid in connection with the borrowings and dividends paid for the six months ended June 30, 2021.

Long-Term Debt and Preferred Stock

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The CHP Facility was secured by a mortgage over the lease of the site on which our 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 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, South Power 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.

No principal payments will be due until 2025.

We expect that beginning in May 2025, principal payments will be due on a quarterly basis.

Interest payments on outstanding principal balances will be due quarterly.

Principal payments and interest payments on the South Power 2029 Bonds are guaranteed by NFE.

In the first and second quarters of 2022, South Power issued $121,845, of South Power 2029 Bonds for a total amount outstanding of $221,845 as of June 30, 2022 .

The South Power 2029 Bonds bear interest at an annual fixed rate of 6.50% and shall be repaid in quarterly installments beginning in August 2025 with the final repayment date in May 2029.

Interest payments on outstanding principal balances are due quarterly.Principal payments and interest payments on the South Power 2029 Bonds are guaranteed by NFE.

South Power will be required to comply with certain financial covenants as well as customary affirmative and negative covenants.

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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.

As of June 30, 2022 and December 31, 2021, the remaining unamortized deferred financing costs for the CHP Facility was $6,063 and $3,180, respectively.

Debt and lease restrictions

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(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.

As of June 30, 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 .

GMLP was in compliance with these covenants as of June 30, 2022 .

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.

The Company was in compliance with all covenants as of June 30, 2022.

Debt obligations of equity method investees

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Standby letters of credit are guaranteed, jointly but not severally, by CELSE’s shareholders, NFE and Ebrasil.

The working capital facility is in an aggregate amount of up to $200.0 million (or its equivalent in Reais).

The facility has a term of 12 months, renewable for equal periods by mutual agreement of the parties.

The working capital facility is in an aggregate amount of up to $200.0 million (or its equivalent in Brazilian reais).

The facility has a term of 12 months, and was renewed for an additional 12-month period in July 2022 by mutual agreement of the parties.

Amounts disbursed under the working capital facility accrue interest at a rate referenced to LIBOR+, and contractual margins.

As of March 31, 2022, there were no standby letters of credit issued under this facility.

As of June 30, 2022, there were no standby letters of credit issued under this facility.

Off Balance Sheet Arrangements

As of March 31, 2022 and December 31, 2021, we had no off-balance sheet arrangements that may have a current or future material effect on our consolidated financial position or operating results .

As of June 30, 2022 and December 31, 2021, we had no off-balance sheet arrangements that may have a current or future material effect on our consolidated financial position or operating results .

Critical Accounting Policies and Estimates

A complete discussion of our critical accounting policies and estimates is included in our Annual Report for the year ended December 31, 2021.

There have been no significant changes in our critical accounting policies and estimates in the current year.

A complete discussion of our critical accounting policies and estimates is included in our Annual Report.

As of June 30, 2022, there have been no significant changes to our critical accounting estimates since our Annual Report, except as noted below.

Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances signal that the carrying value of the assets may not be recoverable based on indicators, such as the acceptance of a purchase price from a market participant which is lower than the asset carrying value.

Equity method investments are assessed for an other than temporary loss impairment whenever factors such as an offered purchase price from a market participant is lower than the carrying value of the investment.

In the second quarter of 2022, we considered whether there was any indication of impairment of the equity method investment in CELSEPAR and the long-lived assets of CEBARRA due to the Sergipe Sale.

NFE determined that there was an OTTI of the CELSEPAR equity method investment and an impairment of CEBARRA long-lived assets.

The decline in fair value of these investments was driven by the impact of significant increases in risk-free rates to future cash flows, as well as the country specific risk premium observed in connection with where such investment is held, in the second quarter of 2022.

Our estimate of fair value used in the impairment assessments was based on the purchase price in the SPA, as adjusted by contractual adjustments expected to be made to this purchase price at Closing.

Judgments used to estimate the fair value included the estimation of expected adjustment to the purchase price and the allocation of the purchase price between CELSEPAR and CEBARRA.

Closing is expected in the fourth quarter of 2022, and the gain or loss recognized from the completion of the Sergipe Sale will be impacted by the timing of Closing, the foreign currency exchange rate in effect at Closing, the settlement of working capital and other balances.

Recent Accounting Standards

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis