What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-09 compared with 2023-08-08 · 255 added, 185 removed, 368 unchanged (54% of the section changed)

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We currently source LNG from long-term supply agreements with third-party suppliers and from our own liquefaction facility in Miami, Florida.

Starting in the third quarter of 2023, we expect to begin to source a portion of our LNG from our modular floating liquefaction facilities, which we refer to as "Fast LNG" or "FLNG." The Terminals and Infrastructure segment includes all terminal operations in Jamaica, Puerto Rico, Mexico and Brazil, as well as vessels utilized in our terminal or logistics operations.

Upon the completion of commissioning, we expect to begin to source a portion of our LNG from our modular floating liquefaction facilities, which we refer to as "Fast LNG" or "FLNG." The Terminals and Infrastructure segment includes all terminal operations in Jamaica, Puerto Rico, Mexico and Brazil, as well as vessels utilized in our terminal or logistics operations.

We centrally manage our LNG supply and the deployment of our vessels utilized in our terminal or logistics operations, which allows us to optimally manage our LNG supply and fleet.

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Army Corps of Engineers to support the island’s grid stabilization project with additional power capacity to enable maintenance and repair work on Puerto Rico’s power system and grid.

We commissioned 150MW of duel-fuel power generation using our gas supply in the second quarter of 2023 and we expect that the remaining 200MW will be commissioned in the third quarter of 2023.

We commissioned 150MW of duel-fuel power generation using our gas supply in the second quarter of 2023, and the remaining 200MW was commissioned in September 2023.

In the first quarter of 2023, our wholly-owned subsidiary, Genera PR LLC ("Genera"), was awarded a 10-Year contract for the operation and maintenance of PREPA’s thermal generation assets with the goal of reducing costs and improving reliability of power generation in Puerto Rico.

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In July 2021, we began commercial operations at the Port of Pichilingue in Baja California Sur, Mexico (the “La Paz Facility”).

The La Paz Facility is expected to supply approximately 22,300 MMBtu of LNG per day to our 100MW gas-fired modular power units (the “La Paz Power Plant”) following the start of operations.

The La Paz Facility is expected to supply approximately 22,300 MMBtu of LNG per day to our 100MW gas-fired modular power units (the “La Paz Power Plant”), which we placed into service in the third quarter of 2023.

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.

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We executed the final long-form gas sales agreement in the second quarter of 2023, which is subject to certain conditions precedent including the execution of the final agreement to sell the La Paz Power Plant.

We expect to execute the final long-form agreement to sell the La Paz Power Plant in the second half of 2023.

Miami Facility

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LNG facilities, each with a 20-year term, which are expected to commence in 2027.

Finally, we plan to commence production from our own Fast LNG facilities in the third quarter of 2023 .

Finally, we plan to commence production from our own Fast LNG facilities upon the completion of commissioning .

We plan to expand that capacity when additional Fast LNG units come online over the next two years.

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We limit our exposure to fluctuations in natural gas prices as our pricing in contracts with customers is largely based on the Henry Hub index price plus a fixed fee component.

Additionally, with our own Fast LNG production expected to commence in the third quarter of 2023 , we plan to further mitigate our exposure to variability in LNG prices.

Additionally, with our own Fast LNG production expected to commence in the fourth quarter of 2023 , we plan to further mitigate our exposure to variability in LNG prices.

Due to current market conditions, we expect that our revenue and results of operations will benefit in the near term from selling cargos into the elevated global LNG market.

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At the expiration of third party charters of vessels owned by Energos Infrastructure (“Energos”), an entity formed in 2022 and described in more detail below, we plan to charter these vessels for our own operational purposes.

Two FSRUs, one FSU and LNG carrier are currently utilized in our terminal operations, and the results of operations of these vessels are reflected in the Terminals and Infrastructure segment.

The results of operations of vessels utilized in our terminal operations are reflected in the Terminals and Infrastructure segment.

In August 2022, we completed a transaction (the “Energos Formation Transaction”) with an affiliate of Apollo Global Management, Inc., pursuant to which we transferred ownership of 11 vessel to Energos in exchange for approximately $1.85 billion in cash and a 20% equity interest in Energos.

Ten of the vessels were subject to current or future charters with NFE and one vessel (the Nanook ) was not subject to a future NFE charter.

The in-place and future charters to NFE of ten vessels prevent the recognition of the sale of those vessels to Energos, and the proceeds associated with these vessels have been treated as a failed sale leaseback As a result, these ten vessels continue to be recognized on our consolidated balance sheet as Property, plant and equipment, and the proceeds are recognized as debt.

As a result, these ten vessels continue to be recognized on our consolidated balance sheet as Property, plant and equipment, and the proceeds are recognized as debt.

Consistent with this treatment as a failed sale leaseback, (i) the third party charter revenues continue to be recognized by us as Vessel charter revenue;

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and our LNG terminal (“Ireland Facility”) and power plant in Ireland.

We are also 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 revenue or results of operations.

We are also 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 revenue or results of operations.

The design, development, construction and operation of our projects are highly regulated activities and subject to various approvals and permits.

The process to obtain required permits, approvals and authorizations is complex, time-consuming, challenging and varies in each jurisdiction in which we operate.

The process to obtain required permits, approvals and authorizations is complex, time-

consuming, challenging and varies in each jurisdiction in which we operate.

We obtain required permits, approvals and authorizations in due course in connection with each milestone for our projects.

We describe each of our current development projects below.

We are currently developing multiple modular floating liquefaction facilities to provide a source of low-cost supply of LNG to customers around the world.

We have designed and are constructing offshore liquefaction facilities for our growing customer base that we believe are both faster and more economical to construct than many traditional liquefaction solutions.

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

We are currently developing multiple modular liquefaction facilities to provide a source of low-cost supply of LNG to customers around the world.

We have designed and are constructing liquefaction facilities for our growing customer base that we believe are both faster and more economical to construct than many traditional liquefaction solutions.

Semi-permanently moored floating storage unit(s) (FSUs) will provide LNG storage alongside the floating liquefaction infrastructure, which can be deployed anywhere there is abundant and stranded natural gas.

As noted below, we are also in discussions with CFE to utilize our FLNG design in an onshore application.

Our initial Fast LNG units are being constructed at the Kiewit Offshore Services shipyard near Corpus Christi, Texas.

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In partnership with Kiewit, we believe we have established an efficient and repeatable process to reduce cost and time to build incremental liquefaction capacity.

We expect to deploy our first Fast LNG unit in the third quarter of 2023 and additional units in 2024.

Our first Fast LNG unit is being deployed offshore to Altamira, Mexico, and we expect to deploy additional units over the next two years.

We plan to deploy several Fast LNG units at different locations around the world and describe our currently planned projects below.

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The 1.4 million ton per annum (“MTPA”) FLNG unit will utilize CFE’s firm pipeline transportation capacity on the Sur de Texas-Tuxpan Pipeline to receive feedgas volumes.

We expect to deploy this FLNG unit to Altamira in the third quarter of 2023.

In addition, we plan to install up to two FLNG units approximately 16 nautical miles off the southeast coast of Grand Isle, Louisiana.

Our first FLNG unit has been installed and connected to the gas pipeline at Altamira, and we are in process of commissioning the project.

We have also entered into a non-binding MOU with CFE to develop and operate an onshore liquefied natural gas terminal with up to four 1.4 MTPA FLNG units.

The terminal is to be located at the existing Altamira LNG import facility and would source feedgas from the Sur de-Texas Tuxpan Pipeline.

The Altamira onshore LNG facility is a world class import facility that will be converted to export LNG similar to other gulf coast regasification terminals.

Existing infrastructure at the facility includes two 150,000m3 storage tanks, deepwater marine berth and access to local gas and power networks.

In addition, we are considering a plan to install up to two FLNG units approximately 16 nautical miles off the southeast coast of Grand Isle, Louisiana.

We have filed applications with the U.S.

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We are developing an offshore facility consisting of an FSRU and associated infrastructure, including mooring and offshore pipelines, in Puerto Sandino, Nicaragua.

We have entered into a 25-year PPA with Nicaragua’s electricity distribution companies, and we expect to utilize approximately 57,500 MMBtu from LNG per day to provide natural gas to

the Puerto Sandino Power Plant in connection with the 25-year power purchase agreement.

We have entered into a 25-year PPA with Nicaragua’s electricity distribution companies, and we expect to utilize approximately 57,500 MMBtu from LNG per day to provide natural gas to the Puerto Sandino Power Plant in connection with the 25-year power purchase agreement.

As part of our long-term partnership with the local utility, we are evaluating solutions to optimize power generation efficiency and allow for additional electrical capacity in a market that is underserved.

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

We substantially completed our Barcarena Facility in 2022 and expect to commence operations by the end of 2023.

We substantially completed our Barcarena Facility in 2022 and expect to commence operations in the first quarter of 2024.

We expect to complete the Barcarena Power Plant and to commence operations in 2025.

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We intend to develop and operate an LNG facility and power plant on the Shannon Estuary, near Tarbert, Ireland.

We are in the process of obtaining final planning permission from An Bord Pleanála (“ABP”) in Ireland.

While the specific timing for receiving the required permits is unknown, we have undertaken pre-development work that will allow us to complete the terminal in approximately 9-15 months after receiving the required permits.

In April 2023, we were awarded a capacity contract for the development of a power plant for approximately 353 MW of electricity generation with a duration of ten years as part of the auction process operated by Ireland’s Transmission System Operator.

The power plant is required to be operational by October 2026.

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

We are challenging this decision.

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 on our results of operations.

Recent Developments

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

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 bear interest at a per annum rate equal to Adjusted Term SOFR plus 3.50%.

We may prepay Term Loans at our option at any time without premium, and we are required to prepay Term Loans with the net proceeds of certain asset sales, condemnations, and debt and convertible securities issuances.

Additionally, commencing with the fourth quarter of 2023, we will be required to prepay Term Loans with 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.

Barcarena Financings

In October 2023, certain 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 will be 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 our 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.

Other Matters

On June 18, 2020, we received an order from the Federal Energy Regulatory Commission ("FERC"), which asked us to explain 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.

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.

On March 19, 2021, FERC issued an order that the San Juan Facility does fall under FERC jurisdiction.

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On July 31, 2023, FERC issued an order stating that it would not take action to prevent the construction and operation of the pipeline and interconnect.

Results of Operations – Three Months Ended June 30, 2023 compared to Three Months Ended March 31, 2023 and Six Months Ended June 30, 2023 compared to Six Months Ended June 30, 2022

Results of Operations – Three Months Ended September 30, 2023 compared to Three Months Ended June 30, 2023 and Nine Months Ended September 30, 2023 compared to Nine Months Ended September 30, 2022

Performance of our two segments, Terminals and Infrastructure and Ships, is evaluated based on Segment Operating Margin.

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Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measure to our Gross margin, and not to rely on any single financial measure to evaluate our business.

The tables below present our segment information for the three months ended June 30, 2023 and March 31, 2023, and for the six months ended June 30, 2023 and June 30, 2022:

Three Months Ended June 30, 2023

The tables below present our segment information for the three months ended September 30, 2023 and June 30, 2023, and for the nine months ended September 30, 2023 and September 30, 2022:

Three Months Ended September 30, 2023

(in thousands of $) Terminals and

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Segment Operating Margin $ 194,743 $ 54,944 $ 249,687 $ 423 $ 250,110

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(in thousands of $) Consolidated

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Consolidated Segment Operating Margin (Non-GAAP) $ 250,110

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(in thousands of $) Terminals and

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Segment Operating Margin $ 239,436 $ 54,398 $ 293,834 $ (3,397) $ 290,437

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(in thousands of $) Consolidated

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Consolidated Segment Operating Margin (Non-GAAP) $ 290,437

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in thousands of $) Terminals and

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Segment Operating Margin $ 836,318 $ 188,020 $ 1,024,338 $ (129,560) $ 894,778

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in thousands of $) Consolidated

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Consolidated Segment Operating Margin (Non-GAAP) $ 894,778

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

(in thousands of $) Terminals and

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Segment Operating Margin $ 700,264 $ 266,597 $ 966,861 $ (147,088) $ 819,773

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

(in thousands of $) Consolidated

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Consolidated Segment Operating Margin (Non-GAAP) $ 819,773

(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 lo sses of $3.9 million and unrealized gains of $141.9 million for the three and six months ended June 30, 2023, respectively, were recognized as a reduction to Cost of sales in the segment measure.

We recognized unrealized gains of $2.8 million and unrealized losses of $108.3 million 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 stat ements 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 $6.2 million 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).

(1) Cost of sales in our segment measure only includes realized gains and losses on derivative transactions that are an economic hedge of commodity purchases and sales, and realized lo sses of $0.3 million and realized gains of $141.6 million for the three and nine months ended September 30, 2023, respectively, were recognized as a reduction to Cost of sales in the segment measure.

We recognized unrealized gains of $0.4 million and unrealized losses of $107.9 million 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 stat ements of operations and comprehensive income (loss) .

We have excluded contract acquisition costs that do not meet the criteria for capitalization from the segment measure.

Contract acquisition costs of $6.2 million for the three and nine months ended September 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).

(2) Cost of sales is presented exclusive of costs included in Depreciation and amortization in the condensed consolidated statements of operations and comprehensive income (loss) .

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Three Months Ended,

(in thousands of $) June 30, 2023 March 31, 2023 Change

(in thousands of $) September 30, 2023 June 30, 2023 Change

Total revenues $ 447,905 $ 495,504 $ (47,599)

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Segment Operating Margin $ 194,743 $ 239,436 $ (44,693)

Six Months Ended,

(in thousands of $) June 30, 2023 June 30, 2022 Change

Nine Months Ended,

(in thousands of $) September 30, 2023 September 30, 2022 Change

Total revenues $ 1,446,017 $ 1,711,241 $ (265,224)

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Total revenue

Total revenue for the Terminals and Infrastructure Segment decreased by $7.1 million for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023.

The decrease was primarily driven by decreases to revenue from LNG cargo sales to third parties and decreases to the Henry Hub index that forms a portion of the pricing to invoice most of our customers in this segment, partially offset by increased volumes delivered to our downstream terminal customers.

The decrease in revenue in the second quarter of 2023 when compared to the first quarter of 2023 was primarily attributable to the following:

• Revenue from LNG cargo sales was $267.8 million for the three months ended June 30, 2023, of which $162.5 million was recognized for a fee received from a customer to cancel a future delivery, decreasing from $349.4 million for the three months ended March 31, 2023.

• The average Henry Hub index pricing used to invoice our downstream customers decreased by 39% for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023.

• Volumes delivered to downstream terminal customers increased from 12.1 TBtus in the first quarter of 2023 to 14.0 TBtu in the second quarter of 2023.

In the second quarter, we began to support the grid stabilization project in Puerto Rico, and our operations at the Palo Seco Power Plant commenced resulting in additional volumes consumed.

Total revenue for the Terminals and Infrastructure Segment decreased by $25.7 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

The decrease was primarily driven by no longer reflecting our pro rata share of revenue from our former investment in CELSEPAR in our segment measure.

Revenue was also

impacted by decreases to the Henry Hub index that forms a portion of the pricing to invoice most of our customers in this segment, increased revenue from LNG cargo sales to third parties and volumes delivered to our downstream terminal customers.

The decrease in revenue in the six months ended June 30, 2023 when compared to the six months ended June 30, 2022 was primarily attributable to the following:

Total revenue for the Terminals and Infrastructure Segment decreased by $47.6 million for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023.

The decrease was primarily driven by decreases to revenue from LNG cargo sales to third parties, partially offset by additional gas sales in Puerto Rico and increases to the Henry Hub index.

The index forms a portion of the pricing to invoice most of our customers in this segment.

The decrease in revenue in third quarter of 2023 when compared to the second quarter of 2023 was primarily attributable to the following:

• We had no revenue from LNG cargo sales for the three months ended September 30, 2023, decreasing from $267.8 million for the three months ended June 30, 2023, as we were able to utilize all LNG purchased under our long-term supply contracts in our terminal operations.

Such decrease was offset by increases to revenue in the three months ended September 30, 2023 when compared to the three months ended June 30, 2023, due to the following:

• Volumes delivered to downstream terminal customers increased from 14.0 TBtus in the second quarter of 2023 to 20.1 TBtu in the third quarter of 2023.

We continue to support the grid stabilization project in Puerto Rico, and we recognized a full quarter of operations for our Palo Seco Power Plant during the third quarter.

We also completed the commissioning of additional power assets at the San Juan Power Plant in September.

Additionally, i n August 2023, we placed our La Paz Power Plant into service, and we began to recognize revenue from power sales from this plant in the local spot market.

• The average Henry Hub index pricing used to invoice our downstream customers increased by 22% for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023.

Total revenue for the Terminals and Infrastructure Segment decreased by $265.2 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022.

The decrease was primarily driven by lower LNG cargo sales, no pro rata share of revenue from our former investment in CELSEPAR and a reduction in the Henry Hub index that forms a portion of the pricing to invoice most of our customers in this segment.

The decrease in revenue was partially offset by increased revenue from sales to downstream terminal customers.

The decrease in revenue in the nine months ended September 30, 2023 when compared to the nine months ended September 30, 2022 was primarily attributable to the following:

• Our LNG cargo sales to third parties decreased by $327.7 million for the nine months ended September 30, 2023, decreasing from $944.8 million for the nine months ended September 30, 2022 to $617.1 million nine months ended September 30, 2023.

In the third quarter of 2023, we were able to utilize all LNG purchased under our long-term supply contracts in our terminal operations.

• After the completion of the sale of our investment in CELSEPAR in the fourth quarter of 2022, we no longer recognize revenue from this investment in our segment measure.

Our share of revenue from CELSEPAR was $107.0 million for the six months ended June 30, 2022, respectively, which was primarily comprised of fixed capacity payments received under related PPAs.

Such decrease was offset by increases to revenue in the six months ended June 30 2023 when compared to the six months ended June 30, 2022, due to the following:

• For the six months ended June 30, 2023, volumes delivered to downstream customers were 26.1 TBtu as compared to 15.6 TBtu for the six months ended June 30, 2022.

During the first quarter of 2022, no volumes were consumed by the Bogue Power Plant due to the Port of Montego Bay where our facility resides requiring a reconfiguration and partial relocation of our assets.

Additionally, maintenance activities lowered consumption at the San Juan Power Plant;

these facilities were not impacted by significant maintenance downtime during 2023.

The maintenance downtime in the prior year was most impactful at the San Juan Power Plant, and volumes delivered to the San Juan Power Plant increased from 3.8 TBtus during the six months ended June 30, 2022 to 11.0 TBtu during the six months ended June 30, 2023.

• Revenue from LNG cargos sales was $617.1 million for the six months ended June 30, 2023, of which $332.0 million was recognized for fees received from a customer to cancel future deliveries, as compared to $594.2 million for the six months ended June 30, 2022.

• The average Henry Hub index pricing used to invoice our downstream customers decreased by 54% for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

Our share of revenue from CELSEPAR was $148.3 million for the nine months ended September 30, 2022, which was primarily comprised of fixed capacity payments received under related PPAs.

• The average Henry Hub index pricing used to invoice our downstream customers decreased by 60% for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022

Such decrease was offset by increases to revenue in the nine months ended September 30, 2023 when compared to the nine months ended September 30, 2022, due to the following:

• Volumes delivered to downstream customers were 46.1 TBtu for the nine months ended September 30, 2023 as compared to 28.5 TBtu for the nine months ended September 30, 2022, and these increased volumes were primarily attributable to our operations in Jamaica, Puerto Rico and Mexico.

• In the prior year, maintenance activities significantly lowered consumption at our facilities;

there has been no significant maintenance downtime during 2023.

The maintenance downtime in the prior year was across our facilities, including downtime at our CHP Plant for unplanned maintenance, downtime at our Montego Bay Facility due to a reconfiguration of our assets required by the Port of Montego Bay and maintenance at PREPA's San Juan Power Plants.

Volumes delivered across from these facilities increased by 12.8 TBtu as compared to the nine months ended September 30, 2022.

• In May 2023, we began to support the grid stabilization project in Puerto Rico, commissioning power generation assets at the Palo Seco Power Plant.

In September 2023, we finished commissioning additional power generation assets at the San Juan Power Plant.

We have consumed 4.7 TBtu at these power plants during the nine months ended September 30, 2023 as part of this project.

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 increased by $148.6 million for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023, which was attributable to the following:

• We settled a commodity swap transaction, entered into as economic hedge to reduce market risks associated with commodity prices in the first quarter of 2023, and the realized gain of $146.1 million was included as a reduction of Cost of sales in our segment measure.

For segment performance measures, unrealized mark to market gains and losses are excluded until settled.

In the second quarter of 2023, we recognized a realized loss of $3.9 million as a reduction to Cost of sales in the segment measure.

• Increased cost of LNG purchased from third parties for sale to our downstream customers of $32.1 million.

Cost of sales decreased by $30.0 million for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023, which was attributable to the following:

• We did not incur any cost of LNG purchased from third parties for LNG cargo sales, decreasing our cost by $76.9 million during the third quarter of 2023.

• Vessel costs increased by $23.0 million for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023.

Vessels were used for commissioning of our La Paz Power Plant and our enhanced supply chain for our Puerto Rican operations in the second quarter, and such vessel costs were capitalized.

As these projects became operational in the third quarter we recognized higher expense associated with these vessels.

Further, certain vessels were placed into service at our terminals during the third quarter resulting in higher vessel charter costs.

• Increase in cost of LNG purchased from third parties for sale to our downstream customers of $18.4 million related to higher terminal sales;

volumes delivered to our downstream customers increased by approximately 43% in the current quarter.

and our cost to deliver these volumes increased to $8.08 per MMBtu for the three months ended June 30, 2023 from $7.23 per MMBtu for the three months ended March 31, 2023.

• We incurred decreased cost of LNG purchased from third parties for LNG cargo sales of $21.0 million during the second quarter of 2023 due to decreased volumes delivered.

Cost of sales decreased by $211.3 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022, which was attributable to the following:

Our cost to deliver these volumes decreased to $6.76 per MMBtu for the three months ended September 30, 2023 from $8.08 per MMBtu for the three months ended June 30, 2023.

Cost of sales decreased by $421.4 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022, which was attributable to the following:

• We incurred decreased cost of LNG purchased from third parties for LNG cargo sales of $212.6 million during the nine months ended September 30, 2023, resulting from no LNG cargo sales in the third quarter as well as lower cost under our LNG supply contracts for cargos sold earlier in 2023.

• Realized gains of $141.6 million from the settlement of commodity swap transactions, entered into as an economic hedge to reduce the market risks associated with commodity prices, were included as reduction of cost of sales.

For segment performance measures, unrealized mark to market gains and losses are excluded until settled.

• We incurred decreased cost of LNG purchased from third parties for LNG cargo sales of $26.6 million during the six months ended June 30, 2023 due to decreased cost of LNG under our supply contracts.

• We incurred increased cost of LNG purchased from third parties for sale to our downstream customers of $41.5 million during the six months ended June 30, 2023 due to increased volumes delivered;

we delivered 67% more volumes to our downstream terminal customers in the current period as compared to the six months ended June 30, 2022.

While we delivered significantly more volumes to our downstream customers, our pricing to purchase LNG for delivery to such customers was substantially lower, decreasing to $7.66 per MMBtu for the six months ended June 30, 2023 from $9.66 per MMBtu for the six months ended June 30, 2022.

• Vessel costs decreased by $38.4 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 primarily due to the capitalization of vessel costs for the commissioning of development projects, as well as, vessel costs recognized as inventory when our vessels are used to transport inventory from a supplier's facility to our storage locations and terminals.

• Cost of sales for the six months ended June 30, 2022 included $26.5 million of our share of cost of sales from our investment in CELSEPAR, which was primarily comprised of LNG costs to fuel a power plant owned by CELSEPAR.

The weighted-average cost of our LNG inventory balance to be used in our downstream terminal operations as of June 30, 2023 and December 31, 2022 was $8.09 per MMBtu and $10.42 per MMBtu, respectively.

• Vessel costs decreased by $37.6 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 primarily due to the capitalization of vessel costs for the commissioning of development projects, as well as, vessel costs recognized as inventory when our vessels are used to transport inventory from a supplier's facility to our storage locations and terminals.

• Cost of sales for the nine months ended September 30, 2022 included $28.6 million of our share of cost of sales from our investment in CELSEPAR, which was primarily comprised of LNG costs to fuel a power plant owned by CELSEPAR.

• We incurred increased cost of LNG purchased from third parties for sale to our downstream customers of $15.3 million during the nine months ended September 30, 2023 due to increased volumes delivered;

we delivered 62% more volumes to our downstream terminal customers in the current period as compared to the nine months ended September 30, 2022.

While we delivered significantly more volumes to our downstream customers, our pricing to purchase LNG for delivery to such customers was substantially lower, decreasing to $7.26 per MMBtu for the nine months ended September 30, 2023 from $10.78 per MMBtu for the nine months ended September 30, 2022.

The weighted-average cost of our LNG inventory balance to be used in our downstream terminal operations as of September 30, 2023 and December 31, 2022 was $7.30 per MMBtu and $10.42 per MMBtu, respectively.

Vessel operating expenses

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Once we begin to use a vessel in our terminal operations, the costs of the vessel begin to be included in the Terminals and Infrastructure segment.

For the six months ended June 30, 2022, we incurred $7.7 million of vessel operating expenses in this segment;

we did not incur vessel operating costs in this segment during the six months ended June 30, 2023.

For the nine months ended September 30, 2022, we incurred $11.2 million of vessel operating expenses in this segment;

we did not incur vessel operating costs in this segment during the nine months ended September 30, 2023.

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 $7.0 million for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023.

The increase was primarily attributable to increased lease costs of turbines leased to generate power at the Palo Seco Power Plant as part of the grid stabilization project in Puerto Rico.

Operations and maintenance increased $0.6 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 .

The increase was primarily attributable to increased lease costs of turbines leased to generate power at the Palo Seco Power Plant as part of the grid stabilization project in Puerto Rico, as well as increased payroll costs and logistics costs associated with the continued expansion of our operations.

These increases were offset by the inclusion of our share of Operations and maintenance from our investment in CELSEPAR during the six months ended June 30,

after the sale of our investment in CELSEPAR in the second quarter of 2022, we do not include these costs during six months ended June 30, 2023.

Operations and maintenance increased by $27.1 million for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023.

Starting in the third quarter of 2023, our subsidiary, Genera, began to provide

operations and maintenance services for PREPA's thermal generation assets, and we recognized payroll and other operating costs of $16.3 million.

Under our contract with PREPA, we pass all of these costs onto PREPA, and such billings are recognized as revenue.

In the third quarter, we also undertook activities to ensure that we have LNG supply available for our expanded Puerto Rican operations, including leasing berth space to place a storage vessel to service Puerto Rico, and we incurred additional lease cost associated with this berth space in the third quarter of 2023.

Operations and maintenance increased $31.3 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 .

The increase was primarily attributable to reimbursable payroll and operating costs of Genera and increased lease costs associated with our Puerto Rican operations incurred in the third quarter of 2023.

Additionally, we leased turbines to generate power at the Palo Seco Power Plant as part of the grid stabilization project in Puerto Rico, increasing operations and maintenance costs when compared to the prior year.

These increases were partially offset by the exclusion of our share of Operations and maintenance from the investment in CELSEPAR;

after the sale of our investment in CELSEPAR in the fourth quarter of 2022, we do not include these costs during nine months ended September 30, 2023.

Ships Segment

Three Months Ended,

(in thousands of $) June 30, 2023 March 31, 2023 Change

(in thousands of $) September 30, 2023 June 30, 2023 Change

Total revenues $ 66,557 $ 65,841 $ 716

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Segment Operating Margin $ 54,944 $ 54,398 $ 546

Six Months Ended,

(in thousands of $) June 30, 2023 June 30, 2022 Change

Nine Months Ended,

(in thousands of $) September 30, 2023 September 30, 2022 Change

Total revenues $ 230,315 $ 337,626 $ (107,311)

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

Upon completion of the Hilli Exchange during the first quarter of 2023, we recognized an additional loss on disposal of $37.4 million, which was included in Other expense (income), net.

Upon completion of the Hilli Exchange during the first quarter of 2023, we recognized an additional loss on disposal of $37.4 million, which was included in Other (income) expense, net.

As a result of the Hilli Exchange we no longer have an ownership interest in the Hilli .

NFE shares received from GLNG were cancelled upon the closing of the Hilli Exchange.

As of June 30, 2023, four FSRUs and four LNG carriers were leased to customers under long-term or spot arrangements.

The Spirit and the Mazo continue to be in cold lay-up, and no vessel charter revenue was generated from these vessels.

As of September 30, 2023, four FSRUs and two LNG carriers were leased to customers under long-term or spot arrangements.

In July 2023, we sold the vessel Golar Spirit for a total consideration of $15.8 million resulting in a gain of $7.8 million.

The gain on sale is included in Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss).

The Mazo continues to be in cold lay-up, and no vessel charter revenue was generated from the vessel.

Total revenue

Total revenue for the Ships segment decreased $32.1 million for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023 .

The charters of two vessels concluded in the first quarter of 2023, and these vessels are no longer included in the Ships segment.

Vessel charter revenue in Ships segment is lower due to these vessels coming off charter and no longer being included in the segment.

After the Hilli Exchange at the end of the first quarter of 2023, we no longer recognize revenue from the Hilli, decreasing revenue in the Ships segment in the current quarter.

Total revenue for the Ships segment decreased $62.2 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

Total revenue for the Ships segment increased $0.7 million for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023 .

During the third quarter, there were no reclassifications of vessels out of the Ships segment;

there were also no significant changes the vessel charters.

Total revenue for the Ships segment decreased $107.3 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022.

The decrease in revenue was primarily the result of the sale of the Nanook as part of the Energos Formation Transaction;

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One of our vessel charters was renewed at the beginning of 2023 at a lower rate;

additionally the charters for two vessels concluded in the first quarter of 2023, lowering vessel revenue for the full six months ended June 30, 2023.

additionally the charters for two vessels concluded in the first quarter of 2023, lowering vessel revenue for the full nine months ended September 30, 2023 .

We plan to utilize these vessels in our operations following conversion and other upgrades starting later in 2023.

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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 decreased $7.8 million for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023.

The decrease in vessel operating expenses was attributable to lower costs related to the Hilli after the Hilli Exchange at the end of the first quarter of 2023.

Additionally, b eginning in the second quarter of 2023, two vessels are now included in the Terminals and Infrastructure Segment resulting in decreased vessel operating expenses in the Ship Segment.

Vessel operating expenses decreased $16.5 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 .

Vessel operating expenses increased $0.2 million for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023.

Vessel operating expenses decreased $28.7 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 .

The decrease in vessel operating expenses was primarily due to lower costs related to the Hilli after the Hilli Exchange at the end of the first quarter of 2023.

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Other operating results

Three Months Ended, Six Months Ended,

(in thousands of $) June 30, 2023 March 31, 2023 Change June 30, 2023 June 30, 2022 Change

Three Months Ended, Nine Months Ended,

(in thousands of $) September 30, 2023 June 30, 2023 Change September 30, 2023 September 30, 2022 Change

Selling, general and administrative $ 49,107 $ 55,803 $ (6,696) $ 157,048 $ 165,952 $ (8,904)

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Other (income) expense, net (2,271) (6,584) 4,313 16,150 (31,613) 47,763

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

Income before income from equity method investments and income taxes 87,043 133,153 (46,110) 390,742 347,158 43,584

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

Selling, general and administrative increased $3.7 million for the three months ended June 30, 2023, compared to the three months ended March 31, 2023.

Selling, general and administrative increased by $9.6 million for six months ended

June 30, 2023 as compared to the six months ended June 30, 2022.

The increases were primarily due to increased payroll costs associated with the continued expansion of our operations during 2023.

Selling, general and administrative decreased $6.7 million for the three months ended September 30, 2023, compared to the three months ended June 30, 2023.

We have decreased headcount supporting our administrative activities, and we recognized a decrease to our estimate of annual incentive compensation due to the headcount reduction in the third quarter of 2023.

Selling, general and administrative decreased $8.9 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022.

The decreases were primarily due to lower share-based compensation expense in 2023, offset by higher payroll costs incurred for the nine months ended September 30, 2023 prior to our headcount reduction.

Transaction and integration costs

For the three months ended June 30, 2023, transaction and integration costs remained relatively flat as compared to the three months ended March 31, 2023.

For the six months ended June 30, 2023, we incurred $2.0 million for transaction and integration costs, as compared to $6.8 million for the six months ended June 30, 2022.

For the six months ended June 30, 2022, we incurred transaction and integration costs in connection with the sale of our investment in CELSEPAR, which consisted primarily of financial advisory, legal accounting and consulting costs.

For the three months ended September 30, 2023, we did not incur significant transaction and integration costs.

For the nine months ended September 30, 2023, we incurred $4.8 million for transaction and integration costs, as compared to $12.4 million for the nine months ended September 30, 2022.

For the nine months ended September 30, 2022, we incurred transaction and integration costs primarily associated with the Sergipe Sale.

There were no such significant transactions for the nine months ended September 30, 2023.

Depreciation and amortization

Depreciation and amortization increased $7.7 million for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023 and increased $5.8 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

In 2023, we began to place assets in service as part of the grid stabilization project in Puerto Rico, including turbines leased for the Palo Seco Power Plant under a finance lease.

We also placed other assets in service at the Palo Seco Plant in the second quarter of 2023, increasing depreciation expense in the current quarter.

Depreciation and amortization increased $6.6 million for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023 and increased $18.7 million for the nine months ended September 30, 2023 as

compared to the nine months ended September 30, 2022.

In the second quarter of 2023, we began to place assets in service as part of the grid stabilization project in Puerto Rico, including turbines we own, as well a turbines we leased under a finance lease, at the Palo Seco Power Plant.

These assets were placed into service in the May 2023, and we recognized a full quarter of depreciation in the third quarter of 2023.

Asset impairment expense

As a result of our acquisition of Hygo Transition Limited in 2021, we recognized long-lived assets associated the expansion of the Sergipe Power Plant.

During the six months ended June 30, 2022, we recognized asset impairment expense of $48.1 million, as the fair value of these assets was less than the carrying value, and the asset group was held for sale.

There were no such transactions for the six months ended June 30, 2023.

As a result of our acquisition of Hygo Energy Transition Limited in 2021, we recognized long-lived assets associated with the expansion of the Sergipe Power Plant.

During the nine months ended September 30, 2022, we recognized asset impairment expense of $48.1 million, as the fair value of these assets was less than the carrying value, and the asset group was held for sale.

There were no such transactions for the nine months ended September 30, 2023.

Interest expense

Interest expense decreased by $7.3 million for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023.

The decrease was primarily due to increases in capitalized interest, partially offset by increased interest expense due to borrowings under our expanded Revolving Facility, the issuance of the Equipment Notes and the Short-term Borrowings (each as defined below).

Interest expense increased by $43.3 million for the six months ended June 30, 2023 , as compared to the six months ended June 30, 2022 .

Interest expense increased by $0.4 million for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023.

Increased interest expense due to borrowings under our expanded Revolving Facility and the Bridge Term Loan, as well as the issuance of the Equipment Notes and the Short-term Borrowings (each as defined below), were mostly offset by increases in capitalized interest.

Interest expense increased by $44.5 million for the nine months ended September 30, 2023 , as compared to the nine months ended September 30, 2022 .

The increase was primarily due to an increase in total principal outstanding due to additional principal balance outstanding, including obligations under the Energos Formation Transaction.

The total principal balance on outstanding facilities was $5.5 billion as of June 30, 2023 as compared to total principal outstanding of $4.2 billion as of June 30, 2022.

The total principal balance on outstanding facilities was $6.2 billion as of September 30, 2023 as compared to total principal outstanding of $4.5 billion as of September 30, 2022.

Other (income) expense, net

Other (income) expense, net was $(6.6) million and $25.0 million three months ended June 30, 2023, and March 31, 2023, respectively.

Other expense (income), net was $18.4 million and $(41.8) million for the six months ended June 30, 2023 and June 30, 2022, respectively.

Other income recognized in the three months ended June 30, 2023 was primarily comprised of foreign currency remeasurement net gains.

Other expense recognized in the six months ended June 30, 2023 was primarily comprised of a $37.4 million loss on disposal of Hilli equity method investment in the Hilli Exchange.

Other (income) expense, net was $(2.3) million and $(6.6) million three months ended September 30, 2023, and June 30, 2023, respectively.

Other expense (income), net was $16.2 million and $(31.6) million for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Other income recognized in the three months ended September 30, 2023 was primarily comprised of a $7.8 million gain on the sale of the Golar Spirit and interest income.

This income was partially offset by foreign currency remeasurement losses and realized losses on the sale of certain investments in equity securities.

Other expense recognized in the nine months ended September 30, 2023 was primarily comprised of a $37.4 million loss on disposal of Hilli equity method investment in the Hilli Exchange.

This loss was partially offset by interest income and foreign currency remeasurement net gains.

Tax provision

We recognized a tax provision for the three months ended June 30, 2023 of $15.3 million compared to a tax provision of $29.0 million for the three months ended March 31, 2023.

We recognized a tax provision of $44.3 million for the six months ended June 30, 2023 compared to a tax benefit of $136.2 million for the six months ended June 30, 2022.

significant tax benefit recognized in 2022 was primarily driven by significant discrete items, including the remeasurement of a deferred tax liability in conjunction with an internal reorganization and the impairment of our investment in CELSEPAR.

We have not recognized any significant discrete items through the second quarter of 2023.

We recognized a tax provision for the three months ended September 30, 2023 of $25.2 million compared to a tax provision of $15.3 million for the three months ended June 30, 2023.

Our effective tax rate for the three months ended September 30, 2023 was 28.8% compared to 11.3% for the three months ended June 30, 2023.

Our tax provision and effective tax rate primarily increased due to additional expected income tax expense related to certain of the Company's foreign subsidiaries.

We recognized a tax provision of $69.5 million for the nine months ended September 30, 2023 compared to a tax benefit of $126.2 million for the nine months ended September 30, 2022.

The significant tax benefit recognized in 2022 was primarily driven by significant discrete items, including the remeasurement of a deferred tax liability in conjunction with an internal reorganization and the tax benefit associated with the other-than-temporary impairment on our investment in CELSEPAR.

We have not recognized any significant discrete items through the third quarter of 2023.

Income (loss) from equity method investments

We recognized income from our equity method investments of $2.3 million and $10.0 million for the three months ended June 30, 2023 and March 31, 2023, respectively.

We completed the Hilli Exchange in the first quarter of 2023, and as such, income from equity method investments in the second quarter of 2022 is wholly comprised of earnings from our investment in Energos.

In the first quarter of 2023, we recognized income of $4.0 million from our equity method investment in Energos and $6.0 million of income from our investment in Hilli for the period prior to the completion of the Hilli Exchange.

We recognized income of $12.2 million from our equity method investments in the six months ended June 30, 2023 compared to loss of $322.7 million for the six months ended June 30, 2022.

In connection with the announcement of the sale of our investment in CELSEPAR in the second quarter of 2022, we recognized an other than temporary impairment of the investment in CELSEPAR of $345,447;

We recognized income from our equity method investments of $0.5 million and $2.3 million for the three months ended September 30, 2023 and June 30, 2023, respectively.

We completed the Hilli Exchange in the first quarter of 2023, and as such, income from equity method investments in the second and third quarters of 2023 is wholly comprised of

earnings from our investment in Energos.

Our share of earnings from Energos decreased in the third quarter due to additional vessel operating expenses incurred by Energos.

We recognized income of $12.7 million from our equity method investments in the nine months ended September 30, 2023 compared to loss of $354.4 million for the nine months ended September 30, 2022.

In connection with the announcement of the sale of our investment in CELSEPAR in 2022, we recognized an other than temporary impairment of the investment in CELSEPAR of $369.2 million;

we did not have any such impairments impacting the earnings from our equity method investments in 2023.

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• Our historical financial results do not reflect 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 98% of our LNG volumes from third parties for the six months ended June 30, 2023.

We currently purchase the majority of our supply of LNG from third parties, sourcing approximately 98% of our LNG volumes from third parties for the nine months ended September 30, 2023.

We anticipate that the deployment of Fast LNG floating liquefaction facilities will significantly lower the cost of our LNG supply and reduce our dependence on third-party suppliers.

We expect to deploy our first Fast LNG unit in the third quarter of 2023.

We expect to deploy our first Fast LNG unit upon the completion of commissioning.

• 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 and six months ended June 30, 2023 include our Montego Bay Facility, Old Harbour Facility, San Juan Facility, certain industrial end-users and our Miami Facility.

We have placed a portion of our La Paz Facility into service, and our revenue and results of operations have begun to be impacted by our operations in Mexico.

We have executed agreements to extend and amend our supply of natural gas to multiple CFE power generation facilities in Baja California Sur.

We are also continuing to develop 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.

Our results of operations for the three and nine months ended September 30, 2023 include our Montego Bay Facility, Old Harbour Facility, San Juan Facility, certain industrial end-users and our Miami Facility.

We have placed our La Paz Facility in service, and in the third quarter of 2023, we placed the La Paz Power Plant into service.

We have executed agreements to extend and amend our supply of natural gas to multiple CFE power generation facilities in Baja California Sur, and as such, our revenue and results of operations have begun to be impacted by our operations in Mexico.

We are also continuing to develop our Puerto Sandino Facility, Barcarena Facility, Santa Catarina Facility and Ireland Facility, and our current results do not include revenue and operating results from these projects.

Additionally, we began to deliver power to the Puerto Rican grid from the Palo Seco Power Plant as part of the grid stabilization project in the second quarter of 2023.

Once fully operational, we expect that our power generation assets at both the Palo Seco Power Plant and at the San Juan Power Plant will operate at full capacity, and we expect that our revenue and results of operations will benefit from significant gas consumption required to operate these assets.

At the end of September 2023, we placed additional power generation assets in service at the San Juan Power Plant.

We expect that our power generation assets at both the Palo Seco Power Plant and at the San Juan Power Plant will operate at full capacity, and we expect that our revenue and results of operations will benefit from significant gas consumption required to operate these assets.

• Our historical financial results include the results from our investments in the common units of Hilli LLC and CELSEPAR.

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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 and the reasonably foreseeable future.

Our significant capital projects, primarily our first FLNG unit, are nearing completion, and

as with many capital projects, a significant portion of the overall capital spending becomes due near the completion of the project.

Our significant capital projects, primarily our first FLNG unit, are nearing completion, and as with many capital projects, a significant portion of the overall capital spending becomes due near the completion of the project.

We have also incurred significant capital costs to deploy 350MW of temporary power as part of the grid stabilization project in Puerto Rico.

We expect that the current working capital position to improve based on:

(1) following June 30, 2023, we have borrowed under our new Term Loan Agreement, as well as received additional financing under the Equipment Notes, totaling $485 million;

(2) we have in excess of $2 billion in unencumbered assets that could be sold or levered;

(3) expected cash flows generated from the temporary power project and from sales of our own LNG generated by our first deployed Fast LNG unit;

We expect the current working capital position to improve based on:

(1) following September 30, 2023, we have borrowed under our new Term Loan B Agreement, totaling $856 million;

(2) we have fully funded the construction of our Barcarena Power Plant with new long-term financing in Brazil;

(3) our credit agreements allow for proceeds from the sale of assets to be reinvested in our business, and we have significant non-core assets that could be used to fund our developments;

(4) expected cash flows generated from the temporary power project and from sales of our own LNG

generated by our first deployed Fast LNG unit;

and (5) our relationships with certain significant vendors constructing our Fast LNG assets have allowed us to extend our payment terms to better align with the expected completion of Fast LNG.

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

We have assumed total committed expenditures for all completed and existing projects to be approximately $4,997 million, with approximately $3,526 million having already been paid through June 30, 2023.

We have assumed total committed expenditures for all completed and existing projects to be approximately $6,162 million, with approximately $4,815 million having already been paid through September 30, 2023.

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, Barcarena Facility, Barcarena Power Plant, Santa Catarina Facility and committed capital expenditures to support our grid stabilization project in Puerto Rico.

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

As of June 30, 2023, we have spent approximately $128.6 million to develop the Pennsylvania Facility.

As of September 30, 2023, we have spent approximately $128.6 million to develop the Pennsylvania Facility.

Approximately $22.5 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.

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In connection with the dividend policy update, the Board declared a dividend of $626.3 million, representing $3.00 per Class A share, which was paid during the first quarter of 2023.

Additionally, we declared and paid quarterly dividends totaling $41.0 million during the six months ended June 30, 2023, representing $0.10 per Class A share.

Additionally, we declared and paid quarterly dividends totaling $61.5 million during the nine months ended September 30, 2023, representing $0.10 per Class A share.

Our future dividend policy is within the discretion of our Board of Directors and will depend upon then-existing conditions, including our results of operations and financial condition, capital requirements, business prospects, statutory and contractual restrictions on our ability to pay dividends, including restrictions contained in our debt agreements, and other factors our Board of Directors may deem relevant.

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We are committed to make cash payments in the future pursuant to certain contracts.

The following table summarizes certain contractual obligations in place as of June 30, 2023.

The following table summarizes certain contractual obligations in place as of September 30, 2023.

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

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For information on our long-term debt obligations, see “—Liquidity and Capital Resources—Long-Term Debt” in our Annual Report.

The amounts included in the table above are based on the total debt balance, scheduled maturities, and interest rates in effect as of June 30, 2023.

A portion of debt service will be paid to Energos under charters of vessels included in the Energos Formation Transaction to third parties.

The amounts included in the table above are based on the total debt balance, scheduled maturities, and interest rates in effect as of September 30, 2023.

A portion of our long-term debt obligations will be paid to Energos under charters of vessels included in the Energos Formation Transaction to third parties.

The residual value of these vessels also forms a part of the obligation and will be recognized as a bullet payment at the end of the charters.

As neither these third party charter payments nor the residual value of these vessels represent cash payments due by NFE, such amounts have been excluded from the table above.

Subsequent to September 30, 2023, we 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.

Purchase obligations

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Certain LNG purchase commitments are subject to conditions precedent, and we include these expected commitments in the table above beginning when delivery is expected assuming that all contractual conditions precedent are met.

For purchase commitments priced based upon an index such as Henry Hub, the amounts shown in the table above are based on the spot price of that index as of June 30, 2023.

For purchase commitments priced based upon an index such as Henry Hub, the amounts shown in the table above are based on the spot price of that index as of September 30, 2023.

We have construction purchase commitments in connection with our development projects, including our Fast LNG project, La Paz Facility, Puerto Sandino Facility, Barcarena Facility, Santa Catarina Facility and committed capital expenditures to support our grid stabilization project in Puerto Rico.

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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.

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

The following table summarizes the changes to our cash flows for the six months ended June 30, 2023 and 2022, respectively :

Six Months Ended June 30,

The following table summarizes the changes to our cash flows for the nine months ended September 30, 2023 and 2022, respectively :

Nine Months Ended September 30,

(in thousands of $) 2023 2022 Change

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Financing activities 924,072 249,710 674,362

Net decrease in cash, cash equivalents, and restricted cash $ (640,632) $ (44,121) $ (596,511)

Net (decrease) increase in cash, cash equivalents, and restricted cash $ (604,306) $ 144,855 $ (749,161)

Cash provided by operating activities

Our cash flow provided by operating activities was $503.9 million for the six months ended June 30, 2023, which increased by $332.9 million from cash provided by operating activities of $170.9 million for the six months ended June 30, 2022.

The increase in cash provided by operating activities for the six months ended June 30, 2023 was primarily driven by changes in working capital, including improved collection of receivables, as well as significant cash receipts under our temporary power agreements that are required to be deferred as contract liabilities.

Our cash flow provided by operating activities was $537.2 million for the nine months ended September 30, 2023, which increased by $446.1 million from cash provided by operating activities of $91.1 million for the nine months ended

September 30, 2022.

The increase in cash provided by operating activities for the nine months ended September 30, 2023 was primarily driven by changes in working capital, including improved collection of receivables and the settlement of a significant commodity derivative, as well as significant cash receipts under our temporary power agreements that are required to be deferred as contract liabilities.

Cash (used in) investing activities

Our cash flow used in investing activities was $1,367.1 million for the six months ended June 30, 2023, which increased by $925.4 million from cash used in investing activities of $441.7 million for the six months ended June 30, 2022.

Cash outflows for investing activities during the six months ended June 30, 2023 were used primarily for continued development of our Fast LNG project and assets to service the grid stabilization project in Puerto Rico.

Cash outflows were offset by proceeds of $100.0 million from the sale of our equity method investment in Hilli LLC in the Hilli Exchange.

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

Our cash flow used in investing activities was $2,065.6 million for the nine months ended September 30, 2023, which increased by $1,869.6 million from cash used in investing activities of $196.0 million for the nine months ended September 30, 2022.

Cash outflows for investing activities during the nine months ended September 30, 2023 were used primarily for continued development of our Fast LNG project and assets to service the grid stabilization project in Puerto Rico.

Cash outflows were offset by proceeds of $100.0 million from the sale of our equity method investment in Hilli LLC in the Hilli Exchange, as well as proceeds received from the sale of the Spirit and a portion of our investment in equity securities.

Cash outflows for investing activities during the nine months ended September 30, 2022 were used for continued development of our Fast LNG project, Santa Catarina Facility, and Barcarena Facility.

Cash outflows were offset by proceeds of $593.0 million from the sale of the finance lease of the Nanook .

Cash provided by financing activities

Our cash flow provided by financing activities was $222.6 million for the six months ended June 30, 2023, which decreased by $4.1 million from cash provided by financing activities of $226.7 million for the six months ended June 30, 2022.

Our cash flow provided by financing activities was $924.1 million for the nine months ended September 30, 2023, which increased by $674.4 million from cash provided by financing activities of $249.7 million for the nine months ended September 30, 2022.

In December 2022, our Board of Directors approved and declared a dividend of $626.3 million, representing $3.00 per Class A share;

such dividend payment was made in January 2023.

We have borrowed under our expanded Revolving Facility for total additional borrowings of $741.6 million, with such borrowings primarily used to fund the ongoing development of our Fast LNG project.

We also borrowed $100.0 million under the Equipment Notes to support our grid stabilization project in Puerto Rico and $78.0 million of short-term borrowings under repurchase arrangements.

Cash provided by financing activities during the six months ended June 30, 2022 was primarily due to proceeds from issuance of debt of $437.9 million, offset by repayments of debt of $146.0 million and payment of dividends of $47.4 million.

We have borrowed under our expanded Revolving Facility, Bridge Term Loans, Equipment Notes, as well as short-term borrowings under repurchase arrangements for total additional borrowings of $1,768.7 million.

Such borrowings were primarily used to fund the ongoing development of our Fast LNG project and to support our grid stabilization project in Puerto Rico.

Increased borrowings during 2023 were offset by repayments of debt totaling $104.5 million, primarily the repayment of short-term borrowings under repurchase arrangements.

Cash provided by financing activities during the nine months ended September 30, 2022 was due to proceeds from issuance of debt of $1.9 billion, offset by repayments of debt of $1.5 billion, payment of dividends of $75.1 million and payments related to tax withholdings for shared-based compensation of $72.6 million.

Long-Term Debt and Preferred Stock

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There have been no significant changes to the terms of our outstanding debt, covenant requirements or payment obligations, other than described below.

Bridge Term Loan Credit Agreement

On August 3, 2023, we 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 million.

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

The Bridge Term Loans will mature on August 1, 2024 and are 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.

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.

Equipment Notes

In June 2023, we 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 the grid stabilization project in Puerto Rico (the “Equipment Notes”).

Prior to June 30, 2023, we 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.

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

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

In June 2023, we executed a Master Loan and Security Agreement with a lender to borrow up to $200.0 million under promissory notes secured by certain turbines acquired in the first quarter of 2023 to support the grid stabilization project in Puerto Rico (the “Equipment Notes”).

During the second and third quarters of 2023, we 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.

EB-5 Loan Agreement

On July 21, 2023, we 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 $100.0 million, 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, $37.9 million 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.

Short-term Borrowings

We 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, we had $78,025 due under repurchase arrangements with a weighted average interest rate of 9.43%.

We may, from time to time, enter into sales and repurchase agreements with a financial institution, whereby we sell to the financial institution an LNG cargo and we 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 September 30, 2023, we had $161.8 million due under repurchase arrangements with a weighted average interest rate of 9.74%.

Revolving Facility

In February 2023, we entered into an amendment of our Revolving Facility which increased the commitments by $301.7 million, for a total capacity of $741.7 million.

In the first three quarters of 2023, we entered into amendments of our Revolving Facility which increased the commitments by $426.6 million, for a total capacity of $866.6 million.

The interest rate for borrowings under the Revolving Facility based on the current usage of the facility has not changed, and no changes were made to the maturity date or covenants.

In conjunction with the amendment, we incurred an additional $5.3 million in fees which have been capitalized within Other non-current assets.

In conjunction with these amendments, we incurred an additional $7.0 million in fees which have been capitalized within Other non-current assets.

Debt and lease restrictions

We are 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.

We were in compliance with all covenants as of June 30, 2023.

We were in compliance with all covenants as of September 30, 2023.

Critical Accounting Policies and Estimates

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

As of June 30, 2023 , there have been no significant changes to our critical accounting estimates since our Annual Report.

As of September 30, 2023 , there have been no significant changes to our critical accounting estimates since our Annual Report.

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