What changed in this filing

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Item 1. Financial Statements

2023-11-09 compared with 2023-08-08 · 307 added, 233 removed, 605 unchanged (47% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

As of June 30, 2023 and December 31, 2022

As of September 30, 2023 and December 31, 2022

(Unaudited, in thousands of U.S.

dollars, except share amounts)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current assets

29 unchanged sentences

Stockholders’ equity

Class A common stock, $ 0.01 par value, 750 million shares authorized, 205.0 million issued and outstanding as of June 30, 2023;

Class A common stock, $ 0.01 par value, 750 million shares authorized, 205.0 million issued and outstanding as of September 30, 2023;

208.8 million issued and outstanding as of December 31, 2022

9 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the three and six months ended June 30, 2023 and 2022

For the three and nine months ended September 30, 2023 and 2022

(Unaudited, in thousands of U.S.

dollars, except share and per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

15 unchanged sentences

Other (income) expense, net ( 2,271 ) 10,214 16,150 ( 31,613 )

Loss on extinguishment of debt, net — 14,997 — 14,997

Income before income from equity method investments and income taxes 87,043 97,936 390,742 347,158

1 unchanged sentence

Tax provision (benefit) 25,194 9,971 69,476 ( 126,249 )

Net income (loss) 120,100 ( 178,431 ) 271,666 62,750

Net income 62,338 56,231 334,004 118,981

Net (income) loss attributable to non-controlling interest ( 1,117 ) 5,617 ( 3,329 ) 11,371

Net income (loss) attributable to stockholders $ 119,248 $ ( 169,765 ) $ 269,454 $ 68,504

Net income (loss) per share – basic $ 0.58 $ ( 0.81 ) $ 1.30 $ 0.33

Net income (loss) per share – diluted $ 0.58 $ ( 0.81 ) $ 1.29 $ 0.33

Net income attributable to stockholders $ 61,221 $ 61,848 $ 330,675 $ 130,352

Net income per share – basic $ 0.30 $ 0.30 $ 1.60 $ 0.62

Net income per share – diluted $ 0.30 $ 0.29 $ 1.59 $ 0.62

Weighted average number of shares outstanding – basic 205,032,928 209,629,936 206,249,474 209,749,139

1 unchanged sentence

Other comprehensive income (loss):

Net income (loss) $ 120,100 $ ( 178,431 ) $ 271,666 $ 62,750

Net income $ 62,338 $ 56,231 $ 334,004 $ 118,981

Currency translation adjustment ( 11,356 ) ( 33,087 ) 7,693 48,040

Comprehensive income (loss) 137,008 ( 218,134 ) 290,715 143,877

Comprehensive income 50,982 23,144 341,697 167,021

Comprehensive (income) loss attributable to non-controlling interest ( 795 ) 6,085 ( 3,108 ) 11,029

Comprehensive income (loss) attributable to stockholders $ 136,250 $ ( 208,322 ) $ 288,402 $ 148,821

Comprehensive income attributable to stockholders $ 50,187 $ 29,229 $ 338,589 $ 178,050

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

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three and six months ended June 30, 2023 and 2022

For the three and nine months ended September 30, 2023 and 2022

(Unaudited, in thousands of U.S.

19 unchanged sentences

Balance as of June 30, 2023 205,031,406 $ 2,050 $ 1,039,201 $ 290,564 $ 74,346 $ 144,714 $ 1,550,875

Net income — — — 61,221 — 1,117 62,338

Other comprehensive loss — — — — ( 11,034 ) ( 322 ) ( 11,356 )

Share-based compensation expense — — 227 — — — 227

Dividends — — — ( 20,503 ) — ( 3,019 ) ( 23,522 )

Balance as of September 30, 2023 205,031,406 $ 2,050 $ 1,039,428 $ 331,282 $ 63,312 $ 142,490 $ 1,578,562

Class A common stock Additional

13 unchanged sentences

Balance as of March 31, 2022 207,542,351 $ 2,076 $ 1,888,842 $ 105,870 $ 116,789 $ 204,328 $ 2,317,905

Net income (loss) — — — ( 169,765 ) — ( 8,666 ) ( 178,431 )

Net loss — — — ( 169,765 ) — ( 8,666 ) ( 178,431 )

Other comprehensive loss — — — — ( 38,557 ) ( 1,146 ) ( 39,703 )

3 unchanged sentences

Balance as of June 30, 2022 207,556,249 $ 2,076 $ 1,868,618 $ ( 63,895 ) $ 78,232 $ 187,497 $ 2,072,528

Net income (loss) — — — 61,848 — ( 5,617 ) 56,231

Other comprehensive loss — — — — ( 32,619 ) ( 468 ) ( 33,087 )

Share-based compensation expense — — 13,417 — — — 13,417

Issuance of shares for vested RSU/PSUs 2,291,060 12 ( 12 ) — — — —

Shares withheld from employees related to share-based compensation, at cost ( 1,077,221 ) — ( 59,548 ) — — — ( 59,548 )

Deconsolidation of vessels — — — — — ( 23,569 ) ( 23,569 )

Dividends — — ( 20,756 ) — — ( 3,019 ) ( 23,775 )

Balance as of September 30, 2022 208,770,088 $ 2,088 $ 1,801,719 $ ( 2,047 ) $ 45,613 $ 154,824 $ 2,002,197

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

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the six months ended June 30, 2023 and 2022

For the nine months ended September 30, 2023 and 2022

(Unaudited, in thousands of U.S.

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

3 unchanged sentences

(Earnings) losses of equity method investees ( 12,738 ) 354,426

Drydocking expenditure — ( 12,439 )

Dividends received from equity method investees 5,830 23,195

4 unchanged sentences

Loss on the disposal of equity method investment 37,401 —

Loss on extinguishment of debt — 14,997

Loss on sale of net investment in lease — 11,592

Other 2,211 15,464

4 unchanged sentences

Decrease in right-of-use assets 68,360 51,265

Increase in accounts payable/accrued liabilities 75,746 71,603

Increase (decrease) in accounts payable/accrued liabilities 73,211 ( 10,487 )

Increase (decrease) in amounts due to affiliates 1,613 ( 3,220 )

(Decrease) in lease liabilities ( 56,908 ) ( 47,237 )

Increase (decrease) in other liabilities 116,959 ( 12,668 )

Increase in other liabilities 131,879 40,057

Net cash provided by operating activities 537,184 91,105

2 unchanged sentences

Sale of equity method investment 100,000 —

Proceeds from sale of net investment in lease — 593,000

Other investing activities 26,043 ( 1,794 )

9 unchanged sentences

Impact of changes in foreign exchange rates on cash and cash equivalents 923 ( 4,896 )

Net decrease in cash, cash equivalents and restricted cash ( 639,024 ) ( 46,139 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 603,383 ) 139,959

Cash, cash equivalents and restricted cash – beginning of period 855,083 264,030

4 unchanged sentences

Shares received in Hilli Exchange ( 122,754 ) —

Repurchase obligation $ 24,320 $ —

Investment in Energos — 129,518

Non-cash financing — 41,264

The following table identifies the balance sheet line-items included in Cash and cash equivalents, Current restricted cash, and Non-current restricted cash presented in the Condensed Consolidated Statement of Cash Flows:

Six Months Ended June 30,

Nine Months Ended September 30,

Cash and cash equivalents $ 171,329 $ 364,313

3 unchanged sentences

Cash, cash equivalents and restricted cash – end of period $ 251,700 $ 403,989

Cash and cash equivalents includes $ 11,204 which has been classified as assets held for sale and included in Other non-current assets on the condensed consolidated balance sheets.

Cash and cash equivalents as of September 30, 2023 and 2022 includes $ 14,209 and $ 12,891 , respectively, which have been classified as assets held for sale and included in Other current assets on the condensed consolidated balance sheets.

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

16 unchanged sentences

Operating revenue in the condensed consolidated statements of operations and comprehensive income (loss) includes revenue from sales of LNG and natural gas as well as outputs from the Company’s natural gas-fueled power generation facilities, including power and steam, and the sale of LNG cargos.

For the three and six months ended June 30, 2023, the Company recognized LNG cargo sales to customers of $ 267,777 and $ 617,138 , respectively, which includes $ 162,500 and $ 332,000 of contract settlements, respectively.

LNG cargo sales for the three and six months ended June 30, 2022 were $ 309,030 and $ 594,201 , respectively.

The Company did no t have any LNG cargo sales in the third quarter of 2023.

For the nine months ended September 30, 2023, the Company recognized LNG cargo sales to customers of $ 617,138 , which included $ 332,000 of contract settlements.

LNG cargo sales for the three and nine months ended September 30, 2022 were $ 350,550 and $ 944,751 , respectively.

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

As of June 30, 2023 and December 31, 2022, receivables related to revenue from contracts with customers totaled $ 269,973 and $ 280,382 , respectively, and were included in Receivables, net on the condensed consolidated balance sheets, net of current expected credit losses of $ 805 and $ 884 , respectively.

As of September 30, 2023 and December 31, 2022, receivables related to revenue from contracts with customers totaled $ 351,160 and $ 280,382 , respectively, and were included in Receivables, net on the condensed consolidated balance sheets, net of current expected credit losses of $ 1,133 and $ 884 , respectively.

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

1 unchanged sentence

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

The contract liabilities and contract assets balances as of June 30, 2023 and December 31, 2022 are detailed below:

June 30, 2023 December 31, 2022

The contract assets and contract liabilities balances as of September 30, 2023 and December 31, 2022 are detailed below:

September 30, 2023 December 31, 2022

Contract assets, net - current $ 8,567 $ 8,083

1 unchanged sentence

Total contract assets, net $ 30,743 $ 36,734

Contract liabilities $ 91,771 $ 12,748

Contract liabilities, net - current $ 69,254 $ 12,748

Contract liabilities, net - non-current 41,818 —

Total contract liabilities, net $ 111,072 $ 12,748

Revenue recognized in the year from:

Amounts included in contract liabilities at the beginning of the year $ 12,748 $ 2,951

Contract assets are presented net of expected credit losses of $ 351 and $ 401 as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023 and December 31, 2022, contract assets was comprised of $ 32,603 and $ 36,483 of unbilled receivables, respectively, which represent unconditional rights to payment only subject to the passage of time.

Contract liabilities increased during the six months ended June 30, 2023 due to upfront payments received under the Company's contracts in Puerto Rico to provide temporary power and to operate and maintain PREPA's power generation assets.

Contract assets are presented net of expected credit losses of $ 326 and $ 401 as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023 and December 31, 2022, contract assets was comprised of $ 30,603 and $ 36,483 of unbilled receivables, respectively, which represent unconditional rights to payment only subject to the passage of time.

Contract liabilities increased during the nine months ended September 30, 2023 primarily due to upfront payments received under the Company's contracts in Puerto Rico to provide temporary power and to operate and maintain PREPA's power generation assets.

These payments will be recognized as revenue over the expected term of these contracts.

1 unchanged sentence

These costs can include set-up and mobilization costs incurred ahead of the service period, and such costs will be recognized on a straight-line basis over the expected terms of the agreements.

As of June 30, 2023, the Company has capitalized $ 26,349 of which $ 2,104 of these costs is presented within Prepaid expenses and other current assets, net and $ 24,245 is presented within Other non-current assets, net on the condensed consolidated balance sheets.

As of September 30, 2023, the Company has capitalized $ 26,587 of which $ 2,753 of these costs is presented within Prepaid expenses and other current assets, net and $ 23,834 is presented within Other non-current assets, net on the condensed consolidated balance sheets.

As of December 31, 2022, the Company had capitalized $ 10,377 , of which $ 604 of these costs was presented within Prepaid expenses and other current assets, net and $ 9,773 was presented within Other non-current assets, net on the condensed consolidated balance sheets.

13 unchanged sentences

Total $ 13,026,781

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

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

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

Both sources of variability are expected to be resolved at or shortly before

delivery of each unit of LNG, natural gas, power or steam.

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

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

2 unchanged sentences

The carrying amount of these vessels that are leased to third parties under operating leases is as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Property, plant and equipment $ 917,563 $ 1,292,957

1 unchanged sentence

Property, plant and equipment, net $ 833,060 $ 1,212,724

The components of lease income from vessel operating leases for the three and six months ended June 30, 2023 and 2022 are shown below.

As the Company has not recognized the sale of all of the vessels included in the Energos Formation Transaction, the operating lease income shown below for the three and six months ended June 30, 2023 is comprised of revenue from third-party charters of vessels included in the Energos Formation Transaction.

Three Months Ended June 30, Six Months Ended June 30,

The components of lease income from vessel operating leases for the three and nine months ended September 30, 2023 and 2022 are shown below.

As the Company has not recognized the sale of all of the vessels included in the Energos Formation Transaction, the operating lease income shown below for the three and nine months ended September 30, 2023 is comprised of revenue from third-party charters of vessels included in the Energos Formation Transaction.

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

Total operating lease income $ 67,287 $ 91,426 $ 209,651 $ 254,562

Prior to the completion of the Energos Formation Transaction, the Company's charter of the Nanook was accounted for as a finance lease, and the Company recognized interest income of $ 11,545 and $ 23,126 for the three and six months ended June 30, 2022, respectively, related to this finance lease, which was presented within other revenue in the condensed consolidated statements of operations and comprehensive income (loss).

The Company also recognized revenue of $ 2,784 and $ 4,418 for the three and six months ended June 30, 2022, respectively, related to the operation and services agreement and variable charter revenue within Vessel charter revenue in the condensed consolidated statements of operations and comprehensive income (loss).

Prior to the completion of the Energos Formation Transaction, the Company's charter of the Nanook was accounted for as a finance lease, and the Company recognized interest income of $ 5,517 and $ 28,643 for the three and nine months ended September 30, 2022, respectively, related to this finance lease, which was presented within Other revenue in the condensed consolidated statements of operations and comprehensive income (loss).

The Company also recognized revenue of $ 1,434 and $ 5,852 for the three and nine months ended September 30, 2022, respectively, related to the operation and services agreement and variable charter revenue within Vessel charter revenue in the condensed consolidated statements of operations and comprehensive income (loss).

The Company recognized the sale of the net investment in the finance lease of the Nanook as part of the Energos Formation Transaction.

Subsequent to the Energos Formation Transaction, all cash receipts on vessel charters, including the finance lease of the Nanook , will be received by Energos.

As such, there are no future cash receipts from operating leases, and the future cash receipts from other finance leases are not significant as of June 30, 2023.

As such, there are no future cash receipts from operating leases, and the future cash receipts from other finance leases are not significant as of September 30, 2023.

Leases, as lessee

7 unchanged sentences

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

As of June 30, 2023 and December 31, 2022, ROU assets, current lease liabilities and non-current lease liabilities consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, ROU assets, current lease liabilities and non-current lease liabilities consisted of the following:

September 30, 2023 December 31, 2022

Operating right-of-use-assets $ 418,265 $ 355,883

10 unchanged sentences

Total non-current lease liabilities $ 318,082 $ 302,121

(1) Finance lease ROU assets are recorded net of accumulated amortization of $ 9,693 and $ 2,134 as of June 30, 2023 and December 31, 2022 , respectively.

For the three and six months ended June 30, 2023 and 2022, the Company’s operating lease cost recorded within the condensed consolidated statements of operations and comprehensive income (loss) was as follows:

Three Months Ended June 30, Six Months Ended June 30,

(1) Finance lease ROU assets are recorded net of accumulated amortization of $ 15,582 and $ 2,134 as of September 30, 2023 and December 31, 2022 , respectively.

For the three and nine months ended September 30, 2023 and 2022, the Company’s operating lease cost recorded within the condensed consolidated statements of operations and comprehensive income (loss) was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

5 unchanged sentences

Lease cost - Selling, general and administrative 2,094 1,755 5,901 5,102

For the three months ended June 30, 2023 and 2022, the Company has capitalized $ 14,449 and $ 2,973 of lease costs, respectively.

For the six months ended June 30, 2023 and 2022, the Company has capitalized $ 18,705 and $ 11,215 of lease costs, respectively.

Capitalized costs include vessels and port space used during the commissioning of development

For the three months ended September 30, 2023 and 2022, the Company has capitalized $ 8,111 and $ 4,005 of lease costs, respectively.

For the nine months ended September 30, 2023 and 2022, the Company has capitalized $ 26,816 and $ 15,220

of lease costs, respectively.

Capitalized costs include vessels and port space used during the commissioning of development projects.

Short-term lease costs for vessels chartered by the Company to transport inventory from a supplier’s facilities to the Company’s storage locations are capitalized to inventory.

The Company has leases of turbines, ISO tanks and a parcel of land that transfer the ownership in underlying assets to the Company at the end of the lease, and these leases are treated as finance leases.

For the three and six months ended June 30, 2023 and 2022, the Company’s finance interest expense and amortization recorded in Interest expense and Depreciation and amortization, respectively, within the condensed consolidated statements of operations and comprehensive income (loss) were as follows:

Three Months Ended June 30, Six Months Ended June 30,

The Company has leases of turbines, ISO tanks and a parcel of land that are recognized as finance leases.

For the three and nine months ended September 30, 2023 and 2022, the Company’s finance interest expense and amortization recorded in Interest expense and Depreciation and amortization, respectively, within the condensed consolidated statements of operations and comprehensive income (loss) were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

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

Supplemental cash flow information related to leases was as follows for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

Supplemental cash flow information related to leases was as follows for the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

Cash outflows for operating lease liabilities $ 89,326 $ 73,389

2 unchanged sentences

Right-of-use assets obtained in exchange for new finance lease liabilities 47,672 —

The future payments due under operating and finance leases as of June 30, 2023 are as follows:

The future payments due under operating and finance leases as of September 30, 2023 are as follows:

Operating Leases Financing Leases

11 unchanged sentences

Non-current lease liability 294,972 23,110

As of June 30, 2023, the weighted average remaining lease term for operating leases was 6.4 years and finance leases was 2.4 years.

As of September 30, 2023, the weighted average remaining lease term for operating leases was 6.4 years and finance leases was 2.2 years.

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

The weighted average discount rate associated with operating leases as of June 30, 2023 was 8.8 % and as of December 31, 2022 was 8.5 %.

The weighted average discount rate associated with finance leases as of June 30, 2023 was 8.3 % and as of December 31, 2022 was 5.1 %.

The weighted average discount rate associated with operating leases as of September 30, 2023 was 8.8 % and as of December 31, 2022 was 8.5 %.

The weighted average discount rate associated with finance leases as of September 30, 2023 was 8.2 % and as of December 31, 2022 was 5.1 %.

Financial instruments

5 unchanged sentences

The gain was comprised of a realized gain of $ 146,112 and the reversal of the unrealized gain of $ 104,797 recognized in the fourth quarter of 2022.

In January 2023, the Company entered into a commodity swap transaction.

Mark-to-market unrealized gains of $ 2,816 for the three months ended June 30, 2023 and losses of $ 2,914 for the six months ended June 30, 2023 on this instrument have been recognized in Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss).

In January 2023, the Company entered into a series of commodity swap transactions.

Mark-to-market unrealized gains of $ 975 for the three months ended September 30, 2023 and unrealized losses of $ 1,841 for the nine months ended September 30, 2023 on this instrument have been recognized in Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss).

Interest rate and currency risk management

13 unchanged sentences

• Cost approach – based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

The Company uses the market approach when valuing investment in equity securities which is recorded in Other non-current assets on the condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022.

The Company uses the income approach when valuing the following financial instruments:

◦ Interest rate swap - The Company did not have any interest rate swaps outstanding as of June 30, 2023.

◦ Interest rate swap - The Company did not have any interest rate swaps outstanding as of September 30, 2023.

As of December 31, 2022, the Company had an interest rate swap that was recorded within Other non-current assets on the condensed consolidated balance sheets.

◦ The liability and asset associated with commodity swaps are recorded within Other current liabilities and Prepaid expenses and other current assets on the condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, respectively.

◦ Contingent consideration derivative liability represents consideration due to the sellers in asset acquisitions when certain contingent events occur.

2 unchanged sentences

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

The following table presents the Company’s financial assets and financial liabilities, including those that are measured at fair value, as of June 30, 2023 and December 31, 2022:

The following table presents the Company’s financial assets and financial liabilities, including those that are measured at fair value, as of September 30, 2023 and December 31, 2022:

Level 1 Level 2 Level 3 Total

June 30, 2023

September 30, 2023

Investment in equity securities $ — $ — $ 7,678 $ 7,678

6 unchanged sentences

Contingent consideration derivative liabilities $ — $ — $ 46,619 $ 46,619

The Company believes the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximated their fair value as of June 30, 2023 and December 31, 2022 and are classified as Level 1 within the fair value hierarchy.

The Company believes the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximated their fair value as of September 30, 2023 and December 31, 2022 and are classified as Level 1 within the fair value hierarchy.

The table below summarizes the fair value adjustment to instruments measured at Level 3 in the fair value hierarchy, including the contingent consideration derivative liabilities.

These adjustments have been recorded within Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Contingent consideration derivative liabilities - Fair value adjustment - gain $ ( 22 ) $ 1,385 $ ( 3,035 ) $ 984

Contingent consideration derivative liabilities - Fair value adjustment - (gain) / loss $ ( 2,722 ) $ 177 $ ( 5,757 ) $ 1,161

Foreign currency forward purchase - (gain) — ( 2,923 ) — ( 20,394 )

During the six months ended June 30, 2023 and 2022, the Company had no settlements of other financial instruments or any transfers in or out of Level 3 in the fair value hierarchy.

During the nine months ended September 30, 2023 and 2022, the Company had no settlements or transfers in or out of Level 3 in the fair value hierarchy.

Restricted cash

As of June 30, 2023 and December 31, 2022, restricted cash consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, restricted cash consisted of the following:

September 30, 2023 December 31, 2022

Cash restricted under the terms of loan agreements $ 3,825 $ 124,085

4 unchanged sentences

Non-current restricted cash — 2,581

As of June 30, 2023, the balance presented as collateral for letters of credit and performance bonds includes $ 21,300 to support a letter of credit to facilitate the purchase of turbines that was completed in the third quarter of 2023.

As of September 30, 2023, the balance presented as collateral for letters of credit and performance bonds includes $ 21,300 to support a letter of credit to facilitate the purchase of turbines that was completed in the third quarter of 2023.

A portion of these turbines will be utilized to support the Company's contract to generate temporary power in Puerto Rico.

1 unchanged sentence

Non-current restricted cash is presented in Other non-current assets, net on the condensed consolidated balance sheets.

As of June 30, 2023 and December 31, 2022, inventory consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, inventory consisted of the following:

September 30, 2023 December 31, 2022

LNG and natural gas inventory $ 73,936 $ 15,398

4 unchanged sentences

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

During the six months ended June 30, 2023, the Company recognized an adjustment to inventory of $ 6,232 .

In the second quarter of 2023, the Company acquired a spot cargo at a higher cost to obtain a new customer contract, and the net realizable value of this cargo was below the cost as of June 30, 2023.

No adjustments were recorded during the six months ended June 30, 2022.

In the second quarter of 2023, the Company acquired a spot cargo at a higher cost to obtain a new customer contract.

The net realizable value of this cargo was below the cost as of June 30, 2023, and as such, we recognized an adjustment to inventory of $ 6,232 .

No adjustments were recorded during the three months ended September 30, 2023 or the nine months ended September 30, 2022.

Prepaid expenses and other current assets

As of June 30, 2023 and December 31, 2022, prepaid expenses and other current assets consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, prepaid expenses and other current assets consisted of the following:

September 30, 2023 December 31, 2022

Prepaid expenses $ 26,831 $ 56,380

2 unchanged sentences

Due from affiliates 1,542 698

Assets held for sale 48,879 —

Other current assets 18,559 27,504

1 unchanged sentence

Prepaid expenses as December 31, 2022 included $ 34,882 of prepaid LNG inventory.

The Company does no t have any significant prepaid LNG as of June 30, 2023.

Other current assets as of June 30, 2023 and December 31, 2022 primarily consists of deposits and the current portion of contract assets (Note 4).

The Company does no t have any significant prepaid LNG inventory as of September 30, 2023.

Other current assets as of September 30, 2023 and December 31, 2022 primarily consists of deposits and the current portion of contract assets (Note 4).

Assets held for sale

In the third quarter of 2022, NFE Brazil Holdings LLC ("Brazil Holdings"), a consolidated indirect subsidiary of NFE and indirect owner of Pecém Energia S.A.

(“Pecém”) and Energetica Camacari Muricy II S.A.

(“Muricy”), and Centrais Elétricas de Pernambuco S.A.

– EPESA (“EPESA”), entered into a Share Purchase Agreement pursuant to which Brazil Holdings agreed to sell 100 % of the shares of Pecém and Muricy to EPESA, following an internal reorganization.

The sale price includes cash consideration of BRL 59 million (approximately $ 12 million using the exchange rate as of September 30, 2023), as well as additional consideration for the satisfaction of certain milestones.

Consideration under this agreement also includes potential future earnout payments based on the revenue generated from power purchase agreements held by Pecém and Muricy.

The sale of Pecém and Muricy was approved by Agência Nacional de Energia Elétrica ("ANEEL") after the balance sheet date;

the sale is subject to customary terms and conditions and conditions precedent prior to closing.

All assets and liabilities of Pecém and Muricy were classified as held for sale as of September 30, 2023 and December 31, 2022 .

The estimated fair value of these entities based on the consideration in the agreement was in excess of the carrying value, and no impairment loss was recognized upon classification as held for sale.

Assets held for sale include a cash balance of $ 14,209 and $ 11,614 as of September 30, 2023 and December 31, 2022, respectively , which have been included in the ending cash and cash equivalents on the condensed consolidated statement of cash flows.

Equity method investments

Changes in the balance of the Company’s equity method investments is as follows:

June 30, 2023

September 30, 2023

Equity method investments as of December 31, 2022

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Sale of equity method investments ( 260,156 )

Equity method investments as of June 30, 2023

The carrying amounts of the Company's equity method investments as of June 30, 2023 and December 31, 2022 are:

June 30, 2023 December 31, 2022

Equity method investments as of September 30, 2023

The carrying amounts of the Company's equity method investments as of September 30, 2023 and December 31, 2022 are:

September 30, 2023 December 31, 2022

Hilli LLC $ — $ 260,000

1 unchanged sentence

Total $ 139,058 $ 392,306

As of June 30, 2023, the carrying value of the Company’s equity method investment was less than its proportionate share of the underlying net assets of its investee by $ 1,548 .

As of September 30, 2023, the carrying value of the Company’s equity method investment was less than its proportionate share of the underlying net assets of its investee by $ 1,548 .

At December 31, 2022, the carrying value of the Company’s equity method investments exceeded its proportionate share of the underlying net assets of its investees by $ 16,976 , and the basis difference attributable to amortizable net assets was amortized to Income (loss) from equity method investments in the condensed consolidated statements of operations and comprehensive income (loss) over the remaining estimated useful lives of the underlying assets.

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this impairment was recognized in Income (loss) from equity method investments in the consolidated statements of operations and comprehensive income (loss) .

Upon completion of the Hilli Exchange, a loss on disposal of $ 37,401 was recognized in Other (income) expense, net in the condensed consolidated

statements of operations and comprehensive income (loss) .

Upon completion of the Hilli Exchange, a loss on disposal of $ 37,401 was recognized in Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) .

As a result of the Hilli Exchange, the Company no longer has an ownership interest in the Hilli .

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Due to the timing and availability of financial information of Energos, the Company recognizes its proportional share of the income or loss from the equity method investment on a financial reporting lag of one fiscal quarter.

For the three and six months ended June 30, 2023, the Company has recognized earnings from Energos of $ 2,269 and $ 6,263 .

For the three and nine months ended September 30, 2023, the Company has recognized earnings from Energos of $ 489 and $ 6,752 .

Construction in progress

The Company’s construction in progress activity during the six months ended June 30, 2023 is detailed below:

June 30, 2023

The Company’s construction in progress activity during the nine months ended September 30, 2023 is detailed below:

September 30, 2023

Construction in progress as of December 31, 2022

2 unchanged sentences

Assets placed in service ( 532,390 )

Construction in progress as of June 30, 2023 $ 4,593,132

Interest expense of $ 118,573 and $ 29,495 , inclusive of amortized debt issuance costs, was capitalized for the six months ended June 30, 2023 and 2022, respectively.

Construction in progress as of September 30, 2023

Interest expense of $ 201,890 and $ 56,778 , inclusive of amortized debt issuance costs, was capitalized for the nine months ended September 30, 2023 and 2022, respectively.

The Company has significant development activities in Latin America as well as the development of the Company's Fast LNG liquefaction solution, and the completion of such developments are subject to risks of successful completion, including those related to government approvals, site identification, financing, construction permitting and contract compliance.

The Company's development activities for the six months ended June 30, 2023 were primarily focused on Fast LNG and to construct temporary power generation assets to support the Puerto Rican grid stabilization project;

additions to construction in progress in the first six months of 2023 of $ 2,031,681 were to develop Fast LNG projects and Puerto Rican temporary power.

The Company's development activities for the nine months ended September 30, 2023 were primarily focused on Fast LNG and the construction of temporary power generation assets to support the Puerto Rican grid stabilization project;

additions to construction in progress in the first nine months of 2023 of $ 2,569,197 were to develop Fast LNG projects and Puerto Rican temporary power.

Assets placed in service during 2023 are primarily comprised of assets to support our Puerto Rican temporary power project and our power plant at the Port of Pichilingue in Baja California Sur, Mexico.

Property, plant and equipment, net

As of June 30, 2023 and December 31, 2022, the Company’s property, plant and equipment, net consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, the Company’s property, plant and equipment, net consisted of the following:

September 30, 2023 December 31, 2022

Vessels $ 1,527,684 $ 1,518,839

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Total property, plant and equipment, net $ 2,563,871 $ 2,116,727

The book value of the vessels that was recognized due to the failed sale leaseback in the Energos Formation Transaction as of June 30, 2023 and December 31, 2022 was $ 1,308,746 and $ 1,328,553 , respectively.

Depreciation expense for the three months ended June 30, 2023 and 2022 totaled $ 30,275 and $ 25,958 , respectively, of which $ 232 and $ 228 , respectively, is included within Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss) .

Depreciation expense for the six months ended June 30, 2023 and 2022 totaled $ 56,275 and $ 52,067 , respectively, of which $ 463 and $ 527 , respectively, is included within Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss) .

The book value of the vessels that was recognized due to the failed sale leaseback in the Energos Formation Transaction as of September 30, 2023 and December 31, 2022 was $ 1,308,795 and $ 1,328,553 , respectively.

Depreciation expense for the three months ended September 30, 2023 and 2022 totaled $ 36,705 and $ 26,326 , respectively, of which $ 230 and $ 222 , respectively, is included within Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss) .

Depreciation expense for the nine months ended September 30, 2023 and 2022 totaled $ 92,980 and $ 78,393 , respectively, of which $ 693 and $ 749 , respectively, is included within Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss) .

Goodwill and intangible assets

The carrying amount of goodwill was $ 776,760 as of both June 30, 2023 and December 31, 2022 .

The carrying amount of goodwill was $ 776,760 as of both September 30, 2023 and December 31, 2022 .

Intangible assets

The following tables summarize the composition of intangible assets as of June 30, 2023 and December 31, 2022:

June 30, 2023

The following tables summarize the composition of intangible assets as of September 30, 2023 and December 31, 2022:

September 30, 2023

Gross Carrying

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Total intangible assets $ 157,464 $ ( 69,245 ) $ ( 2,322 ) $ 85,897

Amortization expense for the three months ended June 30, 2023 and 2022 was $ 6,285 and $ 9,959 , respectively.

Amortization expense for the six months ended June 30, 2023 and 2022 was $ 13,081 and $ 18,302 , respectively.

Amortization expense for the three months ended September 30, 2023 and 2022 was $ 6,290 and $ 9,287 , respectively.

Amortization expense for the nine months ended September 30, 2023 and 2022 was $ 19,371 and $ 27,589 , respectively.

Amortization expense is inclusive of reductions in expense for the amortization of unfavorable contract liabilities.

Intangible assets associated with the acquired power purchase agreements have been classified as held for sale as of June 30, 2023 and December 31, 2022;

Intangible assets associated with the acquired power purchase agreements have been classified as held for sale as of September 30, 2023 and December 31, 2022;

no impairment loss was recognized upon classification as held for sale (See Note 9).

In the third quarter of 2023, An Bord Pleanála, Ireland's planning commission, denied the Company's application for the development of an LNG terminal and power plant in Shannon, Ireland.

The Company is challenging this decision.

Capitalized permits and development rights are primarily comprised of capitalized costs related to this project.

The Company has concluded that these recent events do not indicate that these assets are not recoverable.

The continued development of this project is uncertain and there are multiple risks, including regulatory risks, that could preclude the development of this project, and the results of these risks could have a material effect to the Company's results of operations.

Other non-current assets, net

As of June 30, 2023 and December 31, 2022, Other non-current assets consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, Other non-current assets consisted of the following:

September 30, 2023 December 31, 2022

Assets held for sale $ — $ 40,685

Cost to fulfill (Note 4)

Contract assets, net (Note 4)

22,176 28,651

Investments in equity securities (Note 6)

20,467 17,806

Cost to fulfill (Note 4)

Upfront payments to customers 8,715 9,158

Investments in equity securities (Note 6)

Other 48,278 35,606

Total other non-current assets, net $ 110,681 $ 141,679

The Company recognized unrealized losses on its investments in equity securities of $ 1,314 and $ 898 for the three months ended June 30, 2023 and 2022, respectively, within Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) .

The Company recognized an unrealized gain of $ 1,211 and an unrealized loss of $ 1,090 on its investment in equity securities for the six months ended June 30, 2023 and 2022, respectively, within Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) .

Investments in equity securities include investments without a readily determinable fair value of $ 7,678 as of June 30, 2023 and December 31, 2022.

During the third quarter of 2023, the Company sold certain investments in equity securities recognizing a realized loss of $ 374 .

The remaining investments in equity securities of $ 7,678 as of September 30, 2023 are investments without a readily determinable fair value.

The Company recognized unrealized losses of $ 672 and $ 1,629 on its investments in equity securities for the three months ended September 30, 2023 and 2022, respectively, within Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) .

The Company recognized an unrealized gain of $ 539 and an unrealized loss of $ 2,720 on its investments in equity securities for the nine months ended September 30, 2023 and 2022, respectively, within Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) .

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

Other non-current assets includes deferred financing costs related to the Revolving Facility.

Assets held for sale

In the third quarter of 2022, NFE Brazil Holdings LLC ("Brazil Holdings"), a consolidated indirect subsidiary of NFE and indirect owner of Pecém Energia S.A.

(“Pecém”) and Energetica Camacari Muricy II S.A.

(“Muricy”), and Centrais Elétricas de Pernambuco S.A.

The sale price includes cash consideration of BRL 59 million (approximately $ 12 million using the exchange rate as of June 30,

2023), as well as additional consideration for the satisfaction of certain milestones.

Consideration under this agreement also includes potential future earnout payments based on the revenue generated from power purchase agreements held by Pecém and Muricy.

The sale of Pecém and Muricy is subject to regulatory approval as well as the customary terms and conditions and conditions precedent prior to closing.

All assets and liabilities of Pecém and Muricy were classified as held for sale as of June 30, 2023 and December 31, 2022 .

The estimated fair value of these entities based on the consideration in the agreement was in excess of the carrying value, and no impairment loss was recognized upon classification as held for sale.

The assets and liabilities held for sale have not been classified as a separate financial statement line item on the condensed consolidated balance sheets and are presented as Other non-current assets and Other long-term liabilities.

Liabilities held for sale of $ 20,263 and $ 23,543 are presented as other long-term liabilities as of June 30, 2023 and December 31, 2022, respectively .

Assets held for sale include a cash balance of $ 11,204 and $ 11,614 as of June 30, 2023 and December 31, 2022, respectively , which have been included in the ending cash and cash equivalents on the condensed consolidated statement of cash flows.

Accrued liabilities

As of June 30, 2023 and December 31, 2022, accrued liabilities consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, accrued liabilities consisted of the following:

September 30, 2023 December 31, 2022

Accrued development costs $ 265,061 $ 364,157

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Other current liabilities

As of June 30, 2023 and December 31, 2022 , other current liabilities consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022 , other current liabilities consisted of the following:

September 30, 2023 December 31, 2022

Derivative liabilities $ 20,045 $ 19,458

Contract liabilities 69,254 12,748

Repurchase obligation 24,327 —

Income tax payable 31,180 6,261

Due to affiliates 9,112 7,499

Liabilities held for sale (See Note 9) 21,407 —

Other current liabilities 18,746 6,912

Total other current liabilities $ 169,744 $ 52,878

As of June 30, 2023, the Company recognized a repurchase obligation of $ 24,327 , pursuant to agreement to sell and purchase an LNG cargo with the same customer.

The sale and delivery of the LNG cargo to the customer was completed in the second quarter of 2023;

we expect the purchase of a the LNG cargo to be completed in the third quarter of 2023.

Under these agreements, the Company's price to purchase the LNG cargo exceeded the selling price to the customer, and because the purchase price exceeds the original selling prices, the purchase of the LNG cargo is accounted for as a financing arrangement.

The difference between the Company's purchase price of the LNG cargo and the selling price to the customer is recognized as interest expense.

As of June 30, 2023 and December 31, 2022, debt consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, debt consisted of the following:

September 30, 2023 December 31, 2022

Senior Secured Notes, due September 2025

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1,369,701 1,406,091

Revolving Facility 866,600 —

Bridge Term Loan, due August 2024 391,764 —

South Power 2029 Bonds, due May 2029

216,782 216,177

Equipment Notes, due July 2026 195,399 —

Barcarena Term Loan, due February 2024

198,725 194,427

Revolving Facility 741,600 —

Equipment Notes, due June 2026 98,532 —

EB-5 Loan, due July 2028 37,256 —

Short-term Borrowings 161,835 —

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Long-term debt is recorded at amortized cost on the condensed consolidated balance sheets.

The fair value of the Company's long-term debt is $ 5,217,159 and $ 4,327,311 as of June 30, 2023 and December 31, 2022, respectively, and is classified as Level 2 within the fair value hierarchy.

The fair value of the Company's long-term debt is $ 6,014,096 and $ 4,327,311 as of September 30, 2023 and December 31, 2022, respectively, and is classified as Level 2 within the fair value hierarchy.

Subsequent to September 30, 2023, the Company entered into the BNDES Credit Agreement, Barcarena Debentures and Term Loan B Credit Agreement (each defined and described in Note 24.

Subsequent events).

Proceeds from these new credit arrangements have been or will be used to refinance the Bridge Term Loan and the Barcarena Term Loan on a long term basis, and as such, these principal balances have been shown as non-current on the condensed consolidated balance sheets as of September 30, 2023.

The terms of the Company's debt instruments have been described in the Annual Report on Form 10-K.

Significant changes to the Company's outstanding debt are described below.

Equipment Notes

In June 2023, the Company executed a Master Loan and Security Agreement with a lender to borrow up to $ 200,000 under promissory notes secured by certain turbines acquired in the first quarter of 2023 to support our grid stabilization project in Puerto Rico (the “Equipment Notes”).

Prior to June 30, 2023, the Company borrowed $ 100,000 bearing interest at approximately 7.4 %, and the principal is partially repayable in monthly installments over the 36 month term of the loan with the balance due upon maturity in June 2026.

Proceeds received were net of upfront fees due to the lender, and through June 30, 2023, the Company has incurred $ 1,468 in origination, structuring and other fees, associated with entry into the Equipment Notes .

The Equipment Notes do not contain any restrictive financial covenants.

Short-term Borrowings

The Company may, from time to time, enter into sales and repurchase agreements with a financial institution, whereby the Company sells to the financial institution an LNG cargo and concurrently enters into an agreement to repurchase the same LNG cargo immediately with the repurchase price payable at a future date, generally not to exceed 90-days from the date of the sale and repurchase (the “Short-term Borrowings”).

As of June 30, 2023, the Company had $ 78,025 due under repurchase arrangements with a weighted average interest rate of 9.43 %.

Revolving Facility

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The borrowings under the Revolving Facility bear interest at a Secured Overnight Financing Rate ("SOFR") based rate plus a margin based upon usage of the Revolving Facility.

The Revolving Facility matures in 2025, with the potential for the Company to extend the maturity date once in a one-year increment.

The Revolving Facility will mature in 2026 if the 2025 Notes (as

defined in the Annual Report) are refinanced prior to maturity, with the potential for the Company to extend the maturity date of the Revolving Facility once for a one-year increment ;

if not, the Revolving Facility becomes due approximately 60 days prior to the maturity of the 2025 Notes.

Borrowings under the Revolving Facility may be prepaid, at the option of the Company, at any time without premium.

In 2022, the Revolving Facility was amended twice to increase the borrowing capacity by a total of $ 240,000 , and in February 2023, the Company entered into an amendment which increased the borrowing capacity by $ 301,700 , for a total

capacity of $ 741,700 .

In 2022, the Revolving Facility was amended twice to increase the borrowing capacity by a total of $ 240,000 , and in first three quarters of 2023, the Company entered into amendments which increased the borrowing capacity by $ 426,600 , for a total capacity of $ 866,600 .

The amendments did not impact the interest rate or term of the Revolving Facility, and no deferred costs were written off.

During the first half of 2023, the Company drew $ 741,600 from the Revolving Facility, which is outstanding as of June 30, 2023 .

During the first nine months of 2023, the Company drew $ 866,600 from the Revolving Facility, which is outstanding as of September 30, 2023 .

The Company incurred $ 5,398 in origination, structuring and other fees, associated with entry into the Revolving Facility, which includes additional fees to expand the facility in 2022.

During the first and second quarter of 2023, the Company incurred an additional $ 5,298 in fees in relation to the 2023 amendment.

During the first three quarters of 2023, the Company incurred an additional $ 7,027 in fees in relation to the 2023 amendments.

These costs have been capitalized within Other non-current assets on the condensed consolidated balance sheets.

As of June 30, 2023 and December 31, 2022 , total remaining unamortized deferred financing costs for the Revolving Facility was $ 9,198 and $ 5,172 , respectively.

As of September 30, 2023 and December 31, 2022 , total remaining unamortized deferred financing costs for the Revolving Facility was $ 10,167 and $ 5,172 , respectively.

The obligations under the Revolving Facility are guaranteed by certain of the Company's subsidiaries.

The Company is 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 and onwards.

The Company was in compliance with all covenants as of June 30, 2023.

The Company was in compliance with all covenants as of September 30, 2023.

Bridge Term Loan Credit Agreement

On August 3, 2023, the Company entered into a Bridge Term Loan Credit Agreement (the “Bridge Term Loan Agreement”) pursuant to which the lenders funded term loans (the “Bridge Term Loans”) to the Company in an aggregate principal amount of $ 400,000 .

Bridge Term Loan proceeds may be used for working capital and other general corporate purposes.

The Bridge Term Loans were to mature on August 1, 2024 and were payable in full on the maturity date.

The Bridge Term Loans were repaid in full without penalty using proceeds from the Term Loan B which closed after September 30, 2023 (See Note 24.

Subsequent events).

The Bridge Term Loans were guaranteed on a senior secured basis by each domestic and foreign subsidiary that is a guarantor under the 2025 Notes, 2026 Notes and Revolving Facility (each as defined in the Annual Report).

The Bridge Term Loans were secured by substantially the same collateral as the first lien obligations under the 2025 Notes, 2026 Notes and Revolving Facility.

The Bridge Term Loan Agreement contained usual and customary representations and warranties, and usual and customary affirmative and negative covenants, including requirements to maintain certain levels of total debt to capitalization and total first lien debt to EBITDA, and the ratios required to be maintained were consistent with the requirements under the Revolving Facility.

The Bridge Term Loans bore interest at a per annum rate equal to Adjusted Term SOFR (as defined in the Bridge Term Loan Agreement) plus 3.50 %.

The Company incurred $ 9,628 in origination, structuring and other fees, associated with entry into the Bridge Term Loans Facility.

As of September 30, 2023 , total remaining unamortized deferred financing costs for the Bridge Term Loans was $ 8,236 .

Equipment Notes

During the second and third quarters of 2023, the Company borrowed the full

capacity bearing interest at approximately 7.7 %, and the principal is partially repayable in monthly installments over the 36 month term of the loan with the balance due upon maturity in July 2026.

The Equipment Notes contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants.

The Equipment Notes do not contain any restrictive financial covenants.

Proceeds received were net of upfront fees due to the lender, and through September 30, 2023, the Company has incurred $ 2,516 in origination, structuring and other fees, associated with entry into the Equipment Notes .

As of September 30, 2023 , total remaining unamortized deferred financing costs for the Equipment Notes was $ 2,423 .

EB-5 Loan Agreement

On July 21, 2023, the Company entered into a loan agreement under the U.S.

Citizenship and Immigration Services EB-5 Program (“EB-5 Loan Agreement”) to pay for the development and construction of a new green hydrogen facility in Texas.

The maximum aggregate principal amount available under the EB-5 Loan Agreement is $ 100,000 , and outstanding borrowings bear interest at a fixed rate of 4.75 %.

The loan matures in 5 years from the initial advance with an option to extend the maturity by two one-year periods.

It is expected that the loan will be secured by NFE's green hydrogen facility, and NFE has provided a guarantee of the obligations under the EB-5 Loan Agreement.

In the third quarter of 2023, $ 37,928 was funded under the EB-5 Loan Agreement.

The EB-5 Loan Agreement contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants.

The EB-5 Loan Agreement does not contain any restrictive financial covenants.

The Company has incurred $ 693 in origination, structuring and other fees, associated with entry into the EB-5 Loan Agreement.

As of September 30, 2023 , total remaining unamortized deferred financing costs for the EB-5 Loan Agreement was $ 672 .

Short-term Borrowings

As of September 30, 2023, the Company had $ 161,835 due under repurchase arrangements with a weighted average interest rate of 9.74 %.

Interest expense

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

Interest expense, net of amounts capitalized, recognized for the three and six months ended June 30, 2023 and 2022 consisted of the following:

Three Months Ended June 30, Six Months Ended June 30,

Interest expense, net of amounts capitalized, recognized for the three and nine months ended September 30, 2023 and 2022 consisted of the following:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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Total interest expense $ 64,822 $ 63,588 $ 200,891 $ 156,344

Interest expense on the Vessel Financing Obligation includes non-cash expense of $ 32,460 and $ 82,363 f or the three and six months ended June 30, 2023 related to payments received by Energos from third-party charterers.

The effective tax rate for the three months ended June 30, 2023 was 11.3 % compared to 32.7 % for the three months ended June 30, 2022 .

The total tax provision for the three months ended June 30, 2023 was $ 15,322 compared to a benefit of $ 86,539 for the three months ended June 30, 2022 .

The effective tax rate for the six months ended June 30, 2023 was 14.0 % compared to 185.4 % for the six months ended June 30, 2022 .

The total tax provision for the six months ended June 30, 2023 was $ 44,282 compared to a benefit of $ 136,220 for the six months ended June 30, 2022 .

Interest expense on the Vessel Financing Obligation includes non-cash expense of $ 37,285 and $ 119,648 f or the three and nine months ended September 30, 2023 related to payments received by Energos from third-party charterers.

The effective tax rate for the three months ended September 30, 2023 was 28.8 % compared to 15.1 % for the three months ended September 30, 2022 .

The total tax provision for the three months ended September 30, 2023 was $ 25,194 compared to a provision of $ 9,971 for the three months ended September 30, 2022 .

The Company’s current and prior year interim period effective tax rate and tax provision differ primarily due to significant discrete items recognized in the prior year including the windfalls from share-based compensation and the other-than-temporary impairment recognized on the Company's investment in CELSEPAR.

The effective tax rate for the nine months ended September 30, 2023 was 17.2 % compared to 1,737.1 % for the nine months ended September 30, 2022 .

The total tax provision for the nine months ended September 30, 2023 was $ 69,476 compared to a benefit of $ 126,249 for the nine months ended September 30, 2022 .

Our prior year benefit and effective tax rate was primarily driven by significant discrete items, including the remeasurement of a deferred tax liability in conjunction with an internal reorganization.

The Company has not recognized any significant discrete items in the first half of 2023.

The Company has not recognized any significant discrete items in the first nine months of 2023.

Commitments and contingencies

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Earnings per share

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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The following table presents potentially dilutive securities excluded from the computation of diluted net income per share for the periods presented because its effects would have been anti-dilutive.

June 30, 2023 June 30, 2022

Unvested RSUs — 30,486

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Equity Agreement shares (1)

555,359 422,680 — 422,680

Total 555,359 422,680 — 422,680

1 unchanged sentence

In the fourth quarter of 2022, the Board declared a dividend of $ 626,310 representing $ 3.00 per Class A share, which was paid in January 2023.

The Company also declared and paid dividends of $ 20,503 and $ 20,582 during the three months ended June 30, 2023 and 2022 , respectively, representing $ 0.10 per Class A share.

The Company declared and paid dividends of $ 40,970 and $ 41,336 during the six months ended June 30, 2023 and 2022, respectively, representing $ 0.10 per Class A share.

During each of the three months ended June 30, 2023 and 2022 , the Company paid dividends of $ 3,019 to holders of Golar LNG Partners LP's ("GMLP") 8.75 % Series A Cumulative Redeemable Preferred Units (“Series A Preferred Units”).

During each of the six months ended June 30, 2023 and 2022, the Company paid dividends of $ 6,038 to holders of the Series A Preferred Units.

The Company also declared and paid dividends of $ 20,503 and $ 20,756 during the three months ended September 30, 2023 and 2022 , respectively, representing $ 0.10 per Class A share.

The Company declared and paid dividends of $ 61,473 and $ 62,092 during the nine months ended September 30, 2023 and 2022 , respectively, representing $ 0.10 per Class A share.

During each of the three months ended September 30, 2023 and 2022 , the Company paid dividends of $ 3,019 to holders of Golar LNG Partners LP's ("GMLP") 8.75 % Series A Cumulative Redeemable Preferred Units (“Series A Preferred Units”).

During each of the nine months ended September 30, 2023 and 2022, the Company paid dividends of $ 9,057 to holders of the Series A Preferred Units.

As these equity interests have been issued by one of the Company’s consolidated subsidiaries, the value of the Series A Preferred Units is recognized as non-controlling interest in the condensed consolidated financial statements.

During the three and six months ended June 30, 2023, one of the Company's majority owned consolidated subsidiaries paid a dividend to all shareholders, and the dividend of $ 3,600 paid to the non-controlling shareholders has been recognized as non-controlling interest in the condensed consolidated financial statements.

Share-based compensation

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Vesting is determined based on achievement of a performance metric for the year subsequent to the grant, and the number of shares that will vest can range from zero to a multiple of units granted.

As of June 30, 2023, the Company determined it was not probable that the performance condition required for the PSUs granted in the fourth quarter of 2022 ("2022 Grant") to vest would be achieved, and as such, no compensation expense was recognized for this award.

As of September 30, 2023, the Company determined it was not probable that the performance condition required for the PSUs granted in the fourth quarter of 2022 ("2022 Grant") to vest would be achieved, and as such, no compensation expense was recognized for this award.

PSUs Granted Units Granted Range of Vesting Units Vested / Probable of Vesting Unrecognized

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In the ordinary course of business, Fortress, through affiliated entities, charges the Company for administrative and general expenses incurred pursuant to its Administrative Services Agreement (“Administrative Agreement”).

The charges under the Administrative Agreement that are attributable to the Company totaled $ 1,296 and $ 1,144 for the three months ended June 30, 2023 and 2022, respectively, and totaled $ 2,641 and $ 2,659 for the six months ended June 30, 2023 and 2022, respectively.

The charges under the Administrative Agreement that are attributable to the Company totaled $ 1,643 and $ 1,117 for the three months ended September 30, 2023 and 2022, respectively, and totaled $ 4,284 and $ 3,776 for the nine months ended September 30, 2023 and 2022, respectively.

Costs associated with the Administrative Agreement are included within Selling, general and administrative in the condensed consolidated statements of operations and comprehensive income (loss) .

As of June 30, 2023 and December 31, 2022, $ 2,487 and $ 4,629 were due to Fortress, respectively.

As of September 30, 2023 and December 31, 2022, $ 4,130 and $ 4,629 were due to Fortress, respectively.

In addition to administrative services, an affiliate of Fortress owns and leases an aircraft chartered by the Company for business purposes in the course of operations.

The Company incurred, at aircraft operator rates, charter costs of $ 640 and $ 1,125 for the three months ended June 30, 2023 and 2022, respectively, and $ 1,411 and $ 2,147 for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023 and December 31, 2022, $ 1,232 and $ 416 was due to this affiliate, respectively.

The Co mpany has leased land from Florida East Coast Industries, LLC (“FECI”), which is controlled by funds managed by an affiliate of Fortress.

The Company recognized expense related to the land lease of $ 126 and $ 103 during the three months ended June 30, 2023 and 2022, respectively, and $ 252 and $ 206 during the six months ended June 30, 2023 and 2022, respectively, which was included within Operations and maintenance in the condensed consolidated statements of operations and comprehensive income (loss).

The Company has amounts due to FECI of $ 46 and $ 0 as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023 and December 31, 2022, the Company has recorded a lease liability of $ 3,349 and $ 3,340 , respectively, within Non-current lease liabilities on the condensed consolidated balance sheets.

DevTech investment

In August 2018, the Company entered into a consulting arrangement with DevTech Environment Limited (“DevTech”) to provide business development services to increase the customer base of the Company.

DevTech also contributed cash consideration in exchange for a 10 % interest in a consolidated subsidiary.

The 10 % interest was reflected as non-

controlling interest in the Company’s condensed consolidated financial statements.

The Company recognized approximately $ 96 and $ 119 in expense within Selling, general and administrative for the three months ended June 30, 2023 and 2022, respectively, and $ 201 and $ 217 in expense within Selling, general and administrative for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023 and December 31, 2022, $ 201 and $ 80 were due to DevTech, respectively.

The Company incurred, at aircraft operator rates, charter costs of $ 523 and $ 750 for the three months ended September 30, 2023 and 2022, respectively, and $ 1,934 and $ 2,897 for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023 and December 31, 2022, $ 1,216 and $ 416 was due to this affiliate, respectively.

Fortress affiliated entities

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No costs are incurred for such administrative services by the Company as the Company is fully reimbursed for all costs incurred.

The Company has subleased a portion of office space to affiliates of entities managed by Fortress, and for the three months ended June 30, 2023 and 2022, $ 331 and $ 201 of rent and office related expenses were incurred by these affiliates, respectively.

For the six months ended June 30, 2023 and 2022, $ 541 and $ 396 of rent and office related expenses were incurred by these affiliates, respectively.

As of June 30, 2023 and December 31, 2022, $ 1,176 and $ 700 , respectively, were due from all Fortress affiliated entities.

The Company has subleased a portion of office space to affiliates of entities managed by Fortress, and for the three months ended September 30, 2023 and 2022, $ 280 and $ 99 of rent and office related expenses were incurred by these affiliates, respectively.

For the nine months ended September 30, 2023 and 2022, $ 821 and $ 491 of rent and office related expenses were incurred by these affiliates, respectively.

As of September 30, 2023 and December 31, 2022, $ 1,456 and $ 700 , respectively, were due from all Fortress affiliated entities.

Additionally, an entity formerly affiliated with Fortress and currently owned by Messrs.

Edens and Nardone provides certain administrative services to the Company, as well as providing office space under a month-to-month non-exclusive license agreement.

The Company incurred rent and administrative expenses of approximately $ 660 and $ 582 for the three months ended June 30, 2023 and 2022, respectively, and $ 1,249 and $ 1,182 for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023 and December 31, 2022, $ 3,427 and $ 2,455 were d ue to Fortress affiliated entities, respectively.

As of June 30, 2023, the Company operates in two reportable segments:

The Company incurred rent and administrative expenses of approximately $ 767 and $ 663 for the three months ended September 30, 2023 and 2022, respectively, and $ 2,016 and $ 1,845 for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023 and December 31, 2022, $ 3,698 and $ 2,455 were d ue to Fortress affiliated entities, respectively.

The Co mpany has leased land from Florida East Coast Industries, LLC (“FECI”), which is controlled by funds managed by an affiliate of Fortress.

The Company recognized expense related to the land lease of $ 126 and $ 103 during the three months ended September 30, 2023 and 2022, respectively, and $ 378 and $ 310 during the nine months ended September 30, 2023 and 2022, respectively, which was included within Operations and maintenance in the condensed consolidated statements of operations and comprehensive income (loss).

The Company has amounts due to FECI of $ 69 and $ 0 as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023 and December 31, 2022, the Company has recorded a lease liability of $ 3,363 and $ 3,340 , respectively, on the condensed consolidated balance sheets.

In September 2023, the Company entered into a lease agreement to lease land from Jefferson Terminal South LLC, which is an indirect, majority-owned subsidiary of a public company which is managed by an affiliate of Fortress.

The Company recognized expense related to the land lease of $ 30 during three months ended and nine months ended September 30, 2023, which was included within Operations and maintenance in the condensed consolidated statements of operations and comprehensive income (loss).

The Company does not have any amounts due to Jefferson Terminal South LLC as of September 30, 2023.

As of September 30, 2023 the Company has recorded a lease liability of $ 4,003 on the condensed consolidated balance sheets.

DevTech investment

DevTech also contributed cash consideration in exchange for a 10 % interest in a consolidated subsidiary.

The 10 % interest was reflected as non-controlling interest in the Company’s condensed consolidated financial statements.

The Company recognized approximately $ 117 and $ 111 in expense within Selling, general and administrative for the three months ended September 30, 2023 and 2022, respectively, and $ 318 and $ 328 in expense within Selling, general and administrative for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023 and December 31, 2022, $ 117 and $ 80 were due to DevTech, respectively.

As of September 30, 2023, the Company operates in two reportable segments:

Terminals and Infrastructure and Ships:

• Terminals and Infrastructure includes the Company’s vertically integrated gas to power solutions, spanning the entire production and delivery chain from natural gas procurement and liquefaction to logistics, shipping, facilities and conversion or development of natural gas-fired power generation.

and conversion or development of natural gas-fired power generation.

Vessels that are utilized in the Company’s terminal or logistics operations are included in this segment.

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Terminal and Infrastructure segment includes realized gains and losses from the settlement of derivative transactions entered into as economic hedges to reduce market risks associated with commodity prices.

• Ships includes vessels that are leased to customers under long-term or spot arrangements, and as of June 30, 2023, eight vessels are included in this segment.

• Ships includes vessels that are leased to customers under long-term or spot arrangements, and as of September 30, 2023, six vessels are included in this segment.

The Company’s investment in Energos is also included in the Ships segment.

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Management considers Segment Operating Margin to be the appropriate metric to evaluate and compare the ongoing operating performance of the Company’s segments on a consistent basis across reporting periods as it eliminates the effect of items which management does not believe are indicative of each segment’s operating performance.

The table below presents segment information for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023

The table below presents segment information for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended September 30, 2023

(in thousands of $) Terminals and

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$ 662,717 $ — $ 662,717 $ — $ 662,717

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in thousands of $) Terminals and

14 unchanged sentences

$ 2,911,345 $ — $ 2,911,345 $ — $ 2,911,345

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

(in thousands of $) Terminals and

13 unchanged sentences

$ 451,360 $ 12,690 $ 464,050 $ — $ 464,050

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

(in thousands of $) Terminals and

13 unchanged sentences

$ 890,558 $ 27,127 $ 917,685 $ — $ 917,685

(1) Cost of sales in the Company’s segment measure only includes realized gains and losses on derivative transactions that are an economic hedge of commodity purchases and sales, and realized losses of $ 3,911 and unrealized gains of $ 141,853 for the three and six months ended June 30, 2023, respectively, were recognized as a reduction to Cost of sales in the segment measure.

The Company recognized unrealized gains of $ 2,835 and unrealized losses of $ 108,305 on the mark-to-market value of derivative transactions for the three and six months ended June 30, 2023, respectively, and these gains and losses reconcile Cost of sales in the segment measure to Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss) .

(1) Cost of sales in the Company’s segment measure only includes realized gains and losses on derivative transactions that are an economic hedge of commodity purchases and sales, and realized losses of $ 293 and realized gains of $ 141,560 for the three and nine months ended September 30, 2023, respectively, were recognized as a reduction to Cost of sales in the segment measure.

The Company recognized unrealized gains of $ 423 and unrealized losses of $ 107,882 on the mark-to-market value of derivative transactions for the three and nine months ended September 30, 2023, respectively, and these gains and losses reconcile Cost of sales in the segment measure to Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss) .

The Company has excluded contract acquisition costs that do not meet the criteria for capitalization from the segment measure.

Contract acquisition costs of $ 6,232 for the three and six months ended June 30, 2023 reconcile Cost of sales in the segment measure to Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss).

Contract acquisition costs of $ 0 and $ 6,232 for the three and nine months ended September 30, 2023, respectively, reconcile Cost of sales in the segment measure to Cost of sales in the condensed consolidated statements of operations and comprehensive income (loss).

(2) Capital expenditures includes amounts capitalized to construction in progress and additions to property, plant and equipment during the period.

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(4) Consolidation and Other adjusts for the inclusion of the effective share of revenues, expenses and operating margin attributable to the Company's 50 % ownership of CELSEPAR and the common units of Hilli LLC in the segment measure prior to the disposition of these investments, the exclusion of the unrealized mark-to-market gain or loss on derivative instruments, and the exclusion of non-capitalizable contract acquisition costs.

Consolidated Segment Operating Margin is defined as net income, adjusted for Selling, general and administrative expenses, Transaction and integration costs, Depreciation and amortization, Interest expense, Other expense (income), net, Income from equity method investments and Tax provision (benefit).

Consolidated Segment Operating Margin is defined as net income, adjusted for Selling, general and administrative expenses, Transaction and integration costs, Depreciation and amortization, Asset impairment expense, Interest expense, Other (income) expense, net, Loss on extinguishment of debt, net, Tax provision (benefit) and Income from equity method investments.

The following table reconciles Net income, the most comparable financial statement measure, to Consolidated Segment Operating Margin:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands of $) 2023 2022 2023 2022

5 unchanged sentences

Interest expense 64,822 63,588 200,891 156,344

Other expense (income), net ( 6,584 ) ( 22,102 ) 18,421 ( 41,827 )

Other (income) expense, net ( 2,271 ) 10,214 16,150 ( 31,613 )

Loss on extinguishment of debt, net — 14,997 — 14,997

Tax provision (benefit) 25,194 9,971 69,476 ( 126,249 )

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Subsequent events

EB-5 Loan Agreement

On July 21, 2023, the Company entered into a loan agreement under the U.S.

Citizenship and Immigration Services EB-5 Program (“EB-5 Loan Agreement”) to pay for the development and construction of a new green hydrogen facility in Texas.

The maximum aggregate principal amount available under the EB-5 Loan Agreement is $ 100,000 , and outstanding borrowings bear interest at a fixed rate of 4.75 %.

The loan matures in 5 years from the initial advance with an option to extend the maturity by two one-year periods.

It is expected that the loan will be secured by NFE's green hydrogen facility, and NFE has provided a guarantee of our obligations under the EB-5 Loan Agreement.

In July 2023, $ 25,600 was funded under the EB-5 Loan Agreement.

Term Loan Credit Agreement

On August 3, 2023, the Company entered into a Term Loan Credit Agreement (the “Term Loan Agreement”) pursuant to which the lenders funded term loans (the “Term Loans”) to the Company in an aggregate principal amount of $ 400,000 .

The proceeds of the Term Loans may be used for working capital and other general corporate purposes.

The Term Loans will mature on August 1, 2024 and are payable in full on the maturity date.

The Term Loans are guaranteed on a senior secured basis by each domestic subsidiary that is a guarantor under the 2025 Notes, 2026 Notes and Revolving Facility (each as defined in the Annual Report) and will be guaranteed on a senior secured basis by each foreign guarantor that is a guarantor under the 2025 Notes, 2026 Notes and Revolving Facility (each

as defined in the Annual Report) on a post-closing basis.

The Term Loans are and will be secured by substantially the same collateral as the first lien obligations under the 2025 Notes, 2026 Notes and Revolving Facility.

The Term Loans bear interest at a per annum rate equal to Adjusted Term SOFR (as defined in the Term Loan Agreement) plus 3.50 %.

The Company may prepay Term Loans at its option at any time without premium (subject to customary break funding costs).

The Company is required to prepay Term Loans with the net proceeds of certain asset sales, condemnations, and debt and convertible securities issuances, in each case subject to certain exceptions and thresholds.

Additionally, commencing with the fiscal quarter ending December 31, 2023, the Company will be required to prepay Term Loans with the Company’s Excess Cash Flow (as defined in the Term Loan Agreement).

The Term Loan Agreement contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants, including requirements to maintain certain levels of total debt to capitalization and total first lien debt to EBITDA, and the ratios required to be maintained are consistent with the requirements under the Revolving Facility.

Equipment Notes

On July 31, 2023, we borrowed an additional $ 85,000 under the Equipment Notes, and we expect to receive funding on the final tranche of the Equipment Notes of $ 15,000 in August 2023.

The financing transactions described below were entered into subsequent to September 30, 2023.

Proceeds from these financing transactions, combined with the expected contractual cash flows from recent projects placed in service, are expected to provide the Company with the liquidity necessary to meets its obligations as they become due in the ordinary course of its business.

Barcarena Financings

In October 2023, certain of the Company's Brazilian subsidiaries entered into two long-term financing arrangements, fully funding the construction of the Company's power plant located in Pará, Brazil (the "Barcarena Power Plant") .

Proceeds received will be used to repay the current Barcarena Term Loan and to pay for all remaining expected construction costs through the planned completion of the Barcarena Power Plant in 2025.

The owner of the Barcarena Power Plant entered into a credit agreement with BNDES, the Brazilian Development Bank (the "BNDES Credit Agreement").

The Company is able to borrow up to R$ 1.8 billion under the BNDES Credit Agreement, segregated into three tranches based on the use of proceeds ("BNDES Term Loan").

Each tranche bears a different rate of interest ranging from 2.61 % to 4.41 % plus the fixed rate announced by BNDES.

No principal payments are required until April 2026 and are due quarterly thereafter until maturity in 2045.

The obligations under the BNDES Credit Agreement are guaranteed by certain indirect Brazilian subsidiaries that are constructing the Barcarena Power Plant, and are secured by the Barcarena Power Plant and receivables under the Barcarena Power Plant's PPAs.

These Brazilian subsidiaries are required to comply with customary affirmative and negative covenants, and the BNDES Credit Agreement also provides for customary events of default, prepayment and cure provisions.

Additionally, the parent of the owner of the Barcarena Power Plant entered into an agreement for the issuance of up to $ 200 million of convertible debentures maturing in October 2028 ("Barcarena Debentures").

Interest on the Barcarena Debentures is due quarterly, and interest accrues at an annual rate of 12 %, increasing 1.25 % each year after the third anniversary of issuance.

The Company is able to prepay the Barcarena Debentures, subject to customary break funding

costs, and the Company is required to utilize certain excess cash flows from the Company's Brazilian operations to prepay principal.

The Barcarena Debentures are convertible to shares of one of the Company's indirect Brazilian subsidiaries on the maturity date at the creditors' option, based on the current fair value of this subsidiary's equity at the time of conversion.

The obligations under the Barcarena Debentures are guaranteed by certain indirect Brazilian subsidiaries that own Company's LNG regasification terminals located in Pará, Brazil ("Barcarena Terminal") and Santa Catarina, Brazil .

NFE has also provided a parent company guarantee that will be released once the Barcarena Terminal commences commercial operations.

Brazilian subsidiaries guaranteeing these obligations are required to comply with customary affirmative and negative covenants, and the Barcarena Debentures also provides for customary events of default, prepayment and cure provisions.

Term Loan B Credit Agreement

On October 30, 2023, the Company entered into a credit agreement (the “Term Loan B Agreement”) pursuant to which the lenders funded term loans to the Company in an aggregate principal amount of $ 856 million ("Term Loan B").

The proceeds from the Term Loan B issuance were used to repay the Bridge Term Loans and may be used for working capital and other general corporate purposes.

The Term Loan B will mature in October 2028 if the 2025 Notes and 2026 Notes (each as defined in the Annual Report) are refinanced prior to their maturities;

if not, the Term Loan B becomes due approximately 60 days prior to the maturity of each the 2025 Notes and 2026 Notes.

Quarterly principal payments of approximately $ 2.1 million begin to be due starting March 2024.

The Term Loan B is guaranteed on a senior secured basis by each domestic subsidiary that is a guarantor under the 2025 Notes, 2026 Notes and Revolving Facility (each as defined in the Annual Report) and will be guaranteed on a senior secured basis by each foreign guarantor that is a guarantor under the 2025 Notes, 2026 Notes and Revolving Facility on a post-closing basis.

The Term Loan B is and will be secured by substantially the same collateral as the first lien obligations under the 2025 Notes, 2026 Notes, the Company's letter of credit facility and Revolving Facility.

Additionally the Term Loan B is secured by assets comprising the Company's first Fast LNG project in Altamira, Mexico.

The Term Loan B bears interest at a per annum rate equal to Adjusted Term SOFR (as defined in the Term Loan B Agreement) plus 5.0 %.

The Company may prepay the Term Loan B at its option subject to prepayment premiums until October 2025 and customary break funding costs.

The Company is required to prepay the Term Loan B with the net proceeds of certain asset sales, condemnations, and debt and convertible securities issuances, in each case subject to certain exceptions and thresholds.

Additionally, commencing with the fiscal quarter ending December 31, 2024, the Company will be required to prepay the Term Loan B with the Company’s Excess Cash Flow (as defined in the Term Loan B Agreement).

The Term Loan B Agreement contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants.

No financial covenant compliance is required under the Term Loan B Agreement.

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 1. Financial Statements