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NEW FORTRESS ENERGY INC.

(NFE)
  Report
Real-time Estimate Cboe BZX  -  02:41 2022-12-09 pm EST
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11/22New Fortress Energy Inc. : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Other Events, Financial Statements and Exhibits (form 8-K)
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11/22New Fortress finalizes deal to develop Lakach gas project in Mexico
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11/22New Fortress finalizes deal for Mexico's Lakach gas project
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NEW FORTRESS ENERGY INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

08/05/2022 | 06:18am EST
Certain information contained in the following discussion and analysis,
including information with respect to our plans, strategy, projections and
expected timeline for our business and related financing, includes
forward-looking statements. Forward-looking statements are estimates based upon
current information and involve a number of risks and uncertainties. Actual
events or results may differ materially from the results anticipated in these
forward-looking statements as a result of a variety of factors.

You should read "Risk Factors" and "Cautionary Statement on Forward-Looking
Statements" elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report")
and under similar headings in the Annual Report on Form 10-K for the year ended
December 31, 2021 (our "Annual Report") for a discussion of important factors
that could cause actual results to differ materially from the results described
in or implied by the forward-looking statements contained in the following
discussion and analysis.

The following information should be read in conjunction with our unaudited
condensed consolidated financial statements and accompanying notes included
elsewhere in this Quarterly Report. Our financial statements have been prepared
in accordance with generally accepted accounting principles in the United States
of America ("GAAP"). This information is intended to provide investors with an
understanding of our past performance and our current financial condition and is
not necessarily indicative of our future performance. Please refer to "-Factors
Impacting Comparability of Our Financial Results" for further discussion. Unless
otherwise indicated, dollar amounts are presented in thousands.

Unless the context otherwise requires, references to "Company," "NFE," "we,"
"our," "us" or like terms refer to (i) prior to our conversion from a limited
liability company to a corporation, New Fortress Energy LLC and its subsidiaries
and (ii) following the conversion from a limited liability company to a
corporation, New Fortress Energy Inc. and its subsidiaries. Unless the context
otherwise requires, references to "Company," "NFE," "we," "our," "us" or like
terms refer to (i) prior to the completion of Mergers, New Fortress Energy Inc.
and its subsidiaries, excluding Hygo Energy Transition Ltd. ("Hygo") and its
subsidiaries and Golar LNG Partners LP ("GMLP") and its subsidiaries, and (ii)
after completion of the Mergers, New Fortress Energy Inc. and its subsidiaries,
including Hygo and its subsidiaries and GMLP and its subsidiaries.

Overview


We are a global energy infrastructure company founded to help address energy
poverty and accelerate the world's transition to reliable, affordable, and clean
energy. We own and operate natural gas and liquefied natural gas ("LNG")
infrastructure, and an integrated fleet of ships and logistics assets to rapidly
deliver turnkey energy solutions to global markets. Our near-term mission is to
provide modern infrastructure solutions to create cleaner, reliable energy while
generating a positive economic impact worldwide. Our long-term mission is to
become one of the world's leading carbon emission-free independent power
providing companies. We discuss this important goal in more detail in our Annual
Report, "Items 1 and 2: Business and Properties" under "Sustainability-Toward a
Carbon-Free Future."

On April 15, 2021, we completed the acquisitions of Hygo (the "Hygo Merger" and
GMLP (the "GMLP Merger,"and collectively with the Hygo Merger, the "Mergers") As
a result of the Hygo Merger, we acquired a 50% interest in a 1.5GW power plant
in Sergipe, Brazil (the "Sergipe Power Plant") and its operating FSRU terminal
in Sergipe, Brazil (the "Sergipe Facility"), as well as a terminal and power
plant under development in the State of Pará, Brazil (the "Barcarena Facility"
and "Barcarena Power Plant," respectively), a terminal under development on the
southern coast of Brazil (the "Santa Catarina Facility") and the Nanook, a
newbuild FSRU moored and in service at the Sergipe Facility. As a result of the
Mergers, we acquired a fleet of six other FSRUs, six LNG carriers and an
interest in a floating liquefaction vessel, the Hilli Episeyo (the "Hilli"),
each of which are expected to help support our existing facilities and
international project pipeline. Acquired FSRUs are operating in Brazil,
Indonesia and Jordan under time charters, and uncontracted vessels are available
for short term employment in the spot market.

Subsequent to the completion of the Mergers, our chief operating decision maker
makes resource allocation decisions and assesses performance on the basis of two
operating segments, Terminals and Infrastructure and Ships.

Our Terminals and Infrastructure segment includes 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. We currently source LNG from long-term supply agreements with
third-party suppliers and from our own liquefaction facility in Miami, Florida.
Leased vessels as well as the cost to operate our vessels that are utilized in
our terminal or logistics operations are included in this segment. 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
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acquired and leased fleet. The Terminals and Infrastructure segment includes all
terminal operations in Jamaica, Puerto Rico, Mexico and Brazil, including our
interest in the Sergipe Power Plant.

Our Ships segment includes all vessels acquired in the Mergers which are leased
to customers under long-term or spot arrangements, including the 25-year charter
of Nanook with CELSE. The Company's investment in Hilli LLC, owner and operator
of the Hilli, is also included in the Ships segment. Over time, we expect to
utilize these vessels in our own terminal operations as charter agreements for
these vessels expire.

Our Current Operations - Terminals and Infrastructure


Our management team has successfully employed our strategy to secure long-term
contracts with significant customers in Jamaica and Puerto Rico, including
Jamaica Public Service Company Limited ("JPS"), the sole public utility in
Jamaica, South Jamaica Power Company Limited ("SJPC"), an affiliate of JPS,
Jamalco, a bauxite mining and alumina producer in Jamaica, and the Puerto Rico
Electric Power Authority ("PREPA"), each of which is described in more detail
below. Our assets built to service these significant customers have been
designed with capacity to service other customers.

We currently procure our LNG either by purchasing from a supplier or by
manufacturing it in our liquefaction facility in Dade County, Florida ("Miami
Facility"). Our long-term goal is to develop the infrastructure necessary to
supply our existing and future customers with LNG produced primarily at our own
facilities, including Fast LNG and our expanded delivery logistics chain in
Northern Pennsylvania (the "Pennsylvania Facility") in addition to supplying our
customers through long-term LNG contracts.

Montego Bay Facility


The Montego Bay Facility serves as our supply hub for the north side of Jamaica,
providing natural gas to JPS to fuel the 145MW Bogue Power Plant in Montego Bay,
Jamaica. Our Montego Bay Facility commenced commercial operations in October
2016 and is capable of processing up to 61,000 MMBtu of LNG per day and features
approximately 7,000 cubic meters of onsite storage. The Montego Bay Facility
also consists of an ISO loading facility that can transport LNG to numerous
on-island industrial users.

Old Harbour Facility


The Old Harbour Facility is an offshore facility consisting of an FSRU that is
capable of processing up to 750,000 MMBtus of LNG per day. The Old Harbour
Facility commenced commercial operations in June 2019 and supplies natural gas
to the 190MW Old Harbour power plant ("Old Harbour Power Plant") operated by
SJPC. The Old Harbour Facility is also supplying natural gas to our dual-fired
combined heat and power facility in Clarendon, Jamaica ("CHP Plant"). The CHP
Plant supplies electricity to JPS under a long-term PPA. The CHP Plant also
provides steam to Jamalco under a long-term take-or-pay SSA. In March 2020, the
CHP Plant commenced commercial operation under both the PPA and the SSA and
began supplying power and steam to JPS and Jamalco, respectively. In August
2020, we began to deliver gas to Jamalco to utilize in their gas-fired boilers.

San Juan Facility


Our San Juan Facility became fully operational in the third quarter of 2020. It
is designed as a landed micro-fuel handling facility located in the Port of San
Juan, Puerto Rico. The San Juan Facility has multiple truck loading bays to
provide LNG to on-island industrial users. The San Juan Facility is near the
PREPA San Juan Power Plant and serves as our supply hub for the PREPA San Juan
Power Plant and other industrial end-user customers in Puerto Rico. We have
delivered natural gas to PREPA's power plant under the Fuel Sale and Purchase
Agreement with PREPA since April 2020.

Sergipe Power Plant and Sergipe Facility


As part of the Hygo Merger, we acquired a 50% interest in Centrais Elétricas de
Sergipe Participações S.A. ("CELSEPAR"), which owns Centrais Elétricas de
Sergipe S.A. ("CELSE"), the owner and operator of the Sergipe Power Plant. The
Sergipe Power Plant, a 1.5GW combined cycle power plant, receives natural gas
from the Sergipe Facility through a dedicated 8-kilometer pipeline. The Sergipe
Power Plant is one of the largest natural gas-fired thermal power stations in
Latin America and was built to provide electricity on demand throughout the
Brazilian electric integrated system, particularly during dry seasons when
hydropower is unable to meet the growing demand for electricity in the country.
CELSE has executed multiple PPAs pursuant to which the Sergipe Power Plant is
delivering power to 26 committed offtakers for a period of 25 years. In any
period in which power is not being produced pursuant to the PPAs, we are able to
sell merchant power into the electricity grid at spot prices, subject to local
regulatory approval.

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We also own expansion rights with respect to the Sergipe Power Plant, which are
owned by Centrais Elétricas Barra dos Coqueiros S.A. ("CEBARRA"), a joint
venture with Ebrasil Energia Ltda. ("Ebrasil"), an affiliate of Eletricidade do
Brasil S.A., of which we own a 75% interest. These rights include 190 acres of
land and regulatory permits for two new power generation projects of 1.7GW in
the aggregate. CEBARRA has obtained all permits and other rights necessary to
participate in future government power auctions.

The Sergipe Facility is capable of processing up to 790,000 MMBtu per day and
storing up to 170,000 cubic meters of LNG and supplies approximately 230,000
MMBtu per day (30% of the Sergipe Facility's maximum regasification capacity) of
natural gas to the Sergipe Power Plant, at full dispatch. In June 2022, we
announced the sale of the Sergipe Facility and our interest in the Sergipe Power
Plant to Eneva S.A. See "Recent Developments"

Miami Facility


Our Miami Facility began operations in April 2016. This facility has
liquefaction capacity of approximately 8,300 MMBtu of LNG per day and enables us
to produce LNG for sales directly to industrial end-users in southern Florida,
including Florida East Coast Railway via our train loading facility, and other
customers throughout the Caribbean using ISO containers.

Our Current Operations - Ships


Our Ships segment includes six FSRUs and five LNG carriers, which are leased to
customers under long-term or spot arrangements, including a 25-year charter of
Nanook with CELSE. As these charter arrangements expire, we expect to use these
vessels in our terminal operations and reflect such vessels in our Terminals and
Infrastructure segment. One acquired LNG carrier and one acquired FSRU are
utilized in our terminal operations, and the results of operations of these
vessels are reflected in the Terminals and Infrastructure segment. In July 2022,
we announced a financing transaction with an affiliate of Apollo Global
Management, Inc. collateralized by our vessels. See "Recent Developments"

The Company's investment in Hilli LLC, owner and operator of the Hilli, is also
included in the Ships segment. Hilli Corp, a wholly owned subsidiary of Hilli
LLC, has a Liquefication Tolling Agreement ("LTA") with Perenco Cameroon S.A.
and Société Nationale des Hydrocarbures under which the Hilli provides
liquefaction services through July 2026. Under the LTA, Hilli Corp receives a
monthly tolling fee, consisting of a fixed element of hire and incremental
tolling fees based on the price of Brent crude oil.

Our Development Projects

La Paz Facility


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 of power
supplied by gas-fired modular power units (the "La Paz Power Plant") following
the start of operations. Natural gas supply to the La Paz Power Plant may be
increased to approximately 29,000 MMBtu of LNG per day for up to 135MW of power.
We are exploring a potential sale of the La Paz Power Plant; we do not plan to
recognize a loss on the sale.

Puerto Sandino Facility


We are developing an offshore facility consisting of an FSRU and associated
infrastructure, including mooring and offshore pipelines, in Puerto Sandino,
Nicaragua (the "Puerto Sandino Facility"). We have entered into a 25-year PPA
with Nicaragua's electricity distribution companies, and we expect to utilize
approximately 57,500 MMBtu of LNG per day to provide natural gas to the Puerto
Sandino Power Plant in connection with the 25-year power purchase agreement.

Barcarena Facility


The Barcarena Facility will consist of an FSRU and associated infrastructure,
including mooring and offshore and onshore pipelines. The Barcarena Facility
will be capable of processing up to 790,000 MMBtu per day and storing up to
170,000 cubic meters of LNG. The Barcarena Facility is expected to supply gas to
third-party industrial and power customers as well as a new 605MW combined cycle
thermal power plant to be located in Pará, Brazil which we own (the "Barcarena
Power Plant"), which is supported by multiple 25-year power purchase agreement
to supply electricity to the national electricity grid. The power project is
scheduled to deliver power to nine committed offtakers for 25 years beginning in
2025.
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Santa Catarina Facility


The Santa Catarina Facility will be located on the southern coast of Brazil and
will consist of an FSRU with a processing capacity of approximately 570,000
MMBtus per day and LNG storage capacity of up to 170,000 cubic meters. We are
also developing a 33-kilometer, 20-inch pipeline that will connect the Santa
Catarina Facility to the existing inland Transportadora Brasileira Gasoduto
Bolivia-Brasil S.A. ("TBG") pipeline via an interconnection point in Garuva. The
Santa Catarina Facility and associated pipeline are expected to have a total
addressable market of 15 million cubic meters per day.

Sri Lanka Facility


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

Ireland Facility


We intend to develop and operate an LNG facility (the "Ireland 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,
and we intend to begin construction of the Ireland Facility after we have
obtained the necessary consents and secured contracts with downstream customers
with volumes sufficient to support the development.

Fast LNG


We are currently developing a series of modular floating liquefaction facilities
to provide a source of low-cost supply of LNG for our growing customer base. The
"Fast LNG" design pairs advancements in modular, midsize liquefaction technology
with jack up rigs, semi-submersible rigs or similar marine floating
infrastructure to enable a much lower cost and faster deployment schedule than
today's floating liquefaction vessels. Semi-permanently moored FSU(s) will serve
as LNG storage alongside the floating liquefaction infrastructure, which can be
deployed anywhere there is abundant and stranded natural gas.

Other Projects


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

In particular, we are currently in discussions with Petróleos Mexicanos
("Pemex") to form a long-term strategic partnership to develop the Lakach
deepwater natural gas field for Pemex to supply natural gas to Mexico's onshore
domestic market and for NFE to produce LNG for export to global markets. If the
parties form a partnership, NFE expects to invest in the continued development
of the Lakach field over a two-year period by completing seven offshore wells
and to deploy a 1.4 MTPA Fast LNG unit to liquefy the majority of the produced
natural gas. Remaining natural gas and associated condensate volumes are
expected to be utilized by Pemex in Mexico's onshore domestic market.

Recent Developments

Sergipe Sale


On May 31, 2022, LNG Power Limited ("LNG Power"), an indirect subsidiary of NFE
and direct owner of the CELSEPAR investment, and certain Ebrasil sellers as
owners of CELSEPAR (together with LNG Power, the "Sergipe Sellers"), Eneva S.A.,
as purchaser ("Eneva") and Eletricidade do Brasil S.A. -- Ebrasil, entered into
a Share Purchase Agreement ("SPA") pursuant to which Eneva has agreed to acquire
all of the outstanding shares of CELSEPAR and CEBARRA for a purchase price of
R$6.10 billion in cash (approximately $1.17 billion using the exchange rate as
of June 30, 2022) (the "Sergipe Sale").

The purchase price payable by Eneva accrues interest at a rate of CDI + 1% from
the December 31, 2021 until the date of the Closing (as defined below) and is
subject to certain customary adjustments, including for the amount of any
leakage that has occurred from December 31, 2021 to the date of the Closing,
including (a) making distributions or payments to or for the benefit of Sergipe
Sellers and their affiliates and assuming or incurring liabilities for the
benefit of Sergipe Sellers or their affiliates, and (b) certain fees and
expenses incurred by CELSEPAR and CEBARRA in connection with the Sergipe Sale.
LNG Power also entered into a foreign currency forward associated to mitigate
foreign currency risk to the expected proceeds from the transaction and will
settle at the same time as Closing.
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Under the SPA, the closing of the Sergipe Sale (the "Closing") will occur on the
later of (a) October 3, 2022 and (b) the 10th business day after all conditions
to Closing have been satisfied or waived, or as otherwise agreed to among the
parties. The conditions to Closing include receipt of all required regulatory
approvals, receipt of certain specified material third-party consents and the
approval of the Sergipe Sale by Eneva's shareholders. The Sergipe Sale may be
terminated under certain circumstances, including, among others, (a) by either
Eneva or Sergipe Sellers if Closing has not occurred on or before the date that
is 270 days from the execution date of the SPA, (b) automatically if the Sergipe
Sale is not approved by Eneva's shareholders. The SPA further provides that, (i)
upon termination of the SPA under certain circumstances, Eneva will be required
to pay the Sergipe Sellers a reverse termination fee equal to R$300 million and
(ii) upon termination of the SPA under certain other circumstances, the Sergipe
Sellers will be required to pay Eneva a termination fee equal to R$250 million.

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

The assets of CEBARRA primarily consist of construction in progress, and in
conjunction with the Sergipe Sale, the assets of CEBARRA meet the criteria to be
represented as held for sale and stated at fair value. These assets were
reviewed for impairment upon classification to held for sale, and the Company
recognized an impairment loss of $48,109 in Asset impairment expense in the
condensed consolidated statements of operations and comprehensive income (loss).

Vessel Financing Transaction


On July 2, 2022, certain affiliates of NFE (collectively, the "Vessel Sellers")
and a separate affiliate of NFE acting as contributor (the "Contributor",
together with the Vessel Sellers, the "NFE Vessel Group") entered into an Equity
Purchase and Contribution Agreement (the "Purchase Agreement") with AP Neptune
Holdings Ltd. ("Purchaser"), which is affiliated with certain funds or
investment vehicles managed by affiliates of Apollo Global Management, Inc. (the
"Purchaser Group"), pursuant to which (1) the Contributor and the Purchaser
formed a joint venture (the "JV"), (2) the Vessel Sellers agreed to sell to the
Purchaser eight vessels, (3) the Purchaser will contribute the eight vessels to
the JV and (4) the Contributor will contribute three additional vessels to the
JV. In connection with the transaction, the Nanook SPV facility, Penguin SPV
facility, Celsius SPV facility and Vessel Term Loan Facility are expected to be
extinguished. The cash purchase price for the transaction is subject to
customary purchase price adjustments, and after giving effect to the repayment
of existing debt, we expect to receive net cash proceeds of approximately $1.1
billion (the "Vessel Financing Transaction").

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

The Purchase Agreement contains customary representations, warranties and
covenants by each of the NFE Vessel Group, the Contributor and the Purchaser
Group. Closing of the transactions contemplated by the Purchase Agreement is
subject to customary conditions, including the absence of a material adverse
effect, but is not subject to any regulatory or financing condition or
contingency. Closing is expected to occur in the third quarter of 2022.

The Purchase Agreement contains termination rights for each of the NFE Vessel
Group and the Purchaser Group, including for the material uncured breach of
either the NFE Vessel Group or the Purchaser Group and for the failure to
consummate the transactions by December 30, 2022. Upon termination of the
Purchase Agreement under specified circumstances, the Purchaser Group would owe
to the NFE Vessel Group a termination fee of approximately $80 million.

Cargo Sales


Since August 2021, LNG prices have increased materially, and global events, such
as Russia's invasion of Ukraine, have generated further energy pricing
volatility. We have supply commitments to secure LNG volumes equal to
approximately 100% of our expected needs for our Montego Bay Facility, Old
Harbour Facility, San Juan Facility, La Paz Facility and Puerto Sandino Facility
for the next six years. Due to this significant increase in market pricing of
LNG, we have optimized our supply portfolio to sell a portion of these cargos in
the market, and these sales have positively impacted our results for the first
half of 2022.

COVID-19 Pandemic

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We continue to closely monitor the impact of the novel coronavirus ("COVID-19")
pandemic on all aspects of our operations and development projects, including
our marine operations acquired in the Mergers. Customers in our Terminals and
Infrastructure segment primarily operate under long-term contracts, many of
which contain fixed minimum volumes that must be purchased on a "take-or-pay"
basis. We continue to invoice our customers for fixed minimum volumes even in
cases when our customer's consumption has decreased. We have not changed our
payment terms with these customers, and there has not been deterioration in the
timing or volume of collections.

Many of the vessels acquired in the Mergers operate under long-term contracts
with fixed payments. We are required to have adequate crewing aboard our vessels
to fulfill the obligations under our contracts, and we have implemented safety
measures to ensure that we have healthy qualified officers and crew. We monitor
local or international transport or quarantine restrictions limiting the ability
to transfer crew members off vessels or bring a new crew on board, and
restrictions in availability of supplies needed on board due to disruptions to
third-party suppliers or transportation alternatives, and we have not
experienced significant disruptions in our operations due to these measures or
restrictions.

Based on the essential nature of the services we provide to support power
generation facilities, our operations and development projects have not
currently been significantly impacted by responses to the COVID-19 pandemic. We
remain committed to prioritizing the health and well-being of our employees,
customers, suppliers and other partners. We have implemented policies to screen
employees, contractors, and vendors for COVID-19 symptoms upon entering our
development projects, operations and office facilities. From the beginning of
2020 to June 30, 2022, we have incurred approximately $2.4 million to date for
safety measures introduced into our operations and other responses to the
COVID-19 pandemic.

We are actively monitoring the spread of the pandemic and the actions that
governments and regulatory agencies are taking to fight the spread. We have not
experienced significant disruptions in development projects, charter or terminal
operations from the COVID-19 pandemic; however, there are important
uncertainties including the scope, severity and duration of the pandemic and
resurgences of COVID-19 variants, the actions taken to contain the pandemic or
mitigate its impact, and the direct and indirect economic effects of the
pandemic and containment measures. We do not currently expect these factors to
have a significant impact on our results of operations, liquidity or financial
position, or our development budgets or timelines.

Other Matters


On June 18, 2020, we received an order from the Federal Energy Regulatory
Commission ("FERC") which asked for an explanation as to why our San Juan
Facility is not subject to FERC's jurisdiction under section 3 of the NGA.
Because we do not believe that the San Juan Facility is jurisdictional, we
provided our reply to FERC on July 20, 2020 and requested that FERC act
expeditiously. On March 19, 2021, FERC issued an order that the San Juan
Facility does fall under FERC jurisdiction. FERC directed us to file an
application for authorization to operate the San Juan Facility within 180 days
of the order, which was September 15, 2021, but also found that allowing
operation of the San Juan Facility to continue during the pendency of an
application is in the public interest. FERC also concluded that no enforcement
action against us is warranted, presuming we comply with the requirements of the
order. Parties to the proceeding, including the Company, sought rehearing of the
March 19, 2021 FERC order, and FERC has denied all requests for rehearing, and
the FERC order was affirmed by the United States Court of Appeals for the
District of Columbia Circuit on June 14, 2022. To comply with the FERC's
directive, on September 15, 2021, we filed an application for authorization to
operate the San Juan Facility, which remains pending.


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


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

                                                                   Three Months Ended June 30, 2022
                               Terminals and             Ships(2)            Total Segment           Consolidation           Consolidated
(in thousands of $)          Infrastructure(1)                                                       and Other(3)
Total revenues             $          543,455          $  111,024          $      654,479          $      (69,624)         $     584,855
Cost of sales                         271,948                   -                 271,948                     453                272,401
Vessel operating expenses               4,255              21,288                  25,543                  (6,915)                18,628
Operations and maintenance             29,540                   -                  29,540                  (9,050)                20,490
Segment Operating Margin   $          237,712          $   89,736          $      327,448          $      (54,112)         $     273,336



                                                                  Three Months Ended March 31, 2022
                               Terminals and             Ships(2)            Total Segment           Consolidation           Consolidated
(in thousands of $)          Infrastructure(1)                                                       and Other(3)
Total revenues             $          480,349          $  114,942          $      595,291          $      (90,173)         $     505,118
Cost of sales                         235,532                   -                 235,532                 (27,234)               208,298
Vessel operating expenses               3,492              25,942                  29,434                  (6,470)                22,964
Operations and maintenance             30,242                   -                  30,242                  (7,074)                23,168

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

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                                                                   Six Months Ended June 30, 2022
                               Terminals and             Ships(2)            Total Segment           Consolidation          Consolidated
(in thousands of $)          Infrastructure(1)                                                       and Other(3)
Total revenues             $        1,023,804          $  225,966          $    1,249,770          $     (159,797)         $  1,089,973
Cost of sales                         507,480                   -                 507,480                 (26,781)              480,699
Vessel operating expenses               7,747              47,230                  54,977                 (13,385)               41,592
Operations and maintenance             59,782                   -                  59,782                 (16,124)               43,658
Segment Operating Margin   $          448,795          $  178,736          $      627,531          $     (103,507)         $    524,024



                                                                    Six

Months Ended June 30, 2021

                               Terminals and             Ships(2)            Total Segment           Consolidation           Consolidated
(in thousands of $)          Infrastructure(1)                                                       and Other(3)
Total revenues             $          327,232          $   95,762          $      422,994          $      (53,471)         $     369,523
Cost of sales                         200,122                   -                 200,122                  (2,021)               198,101
Vessel operating expenses                   -              20,175                  20,175                  (4,775)                15,400
Operations and maintenance             39,895                   -                  39,895                  (5,079)                34,816
Segment Operating Margin   $           87,215          $   75,587          $      162,802          $      (41,596)         $     121,206


(1) Terminals and Infrastructure includes our effective share of revenues,
expenses and operating margin attributable to 50% ownership of CELSEPAR. The
losses and earnings attributable to the investment of $389,996 and $36,680 for
the three months ended June 30, 2022 and March 31, 2022, respectively, are
reported in (Loss) income from equity method investments in the condensed
consolidated statements of operations and comprehensive income (loss). In the
six months ended June 30, 2022 and 2021, the losses and earnings attributable to
the investment were $353,315 and $28,447, respectively.
(2) Ships includes our effective share of revenues, expenses and operating
margin attributable to 50% ownership of the Hilli Common Units. The earnings
attributable to the investment of $17,069 and $13,555 for the three months ended
June 30, 2022 and March 31, 2022, respectively, are reported in (Loss) income
from equity method investments in the consolidated statements of operations and
comprehensive income (loss). For the six months ended June 30, 2022 and 2021,
the earnings attributable to the investment were $30,623 and $10,494,
respectively.
(3) Consolidation and Other adjust for the inclusion of our effective share of
revenues, expenses and operating margin attributable to 50% ownership of
CELSEPAR and Hilli Common Units in our segment measure and exclusion of the
unrealized mark-to-market gain or loss on derivative instruments.

Terminals and Infrastructure Segment

                                             Three Months Ended,
(in thousands of $)           June 30, 2022       March 31, 2022        Change
Total revenues               $      543,455      $       480,349      $ 63,106
Cost of sales                       271,948              235,532        36,416
Vessel operating expenses             4,255                3,492           763
Operations and maintenance           29,540               30,242          (702)
Segment Operating Margin     $      237,712      $       211,083      $ 26,629


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                                              Six Months Ended,
(in thousands of $)           June 30, 2022       June 30, 2021        Change
Total revenues               $    1,023,804      $      327,232      $ 696,572
Cost of sales                       507,480             200,122        307,358
Vessel operating expenses             7,747                   -          7,747
Operations and maintenance           59,782              39,895         19,887
Segment Operating Margin     $      448,795      $       87,215      $ 361,580


Total revenue

Total revenue for the Terminals and Infrastructure Segment increased $63,106 for
the three months ended June 30, 2022 as compared to the three months ended March
31, 2022. The increase was primarily driven by increased revenue from LNG cargo
sales to third parties and increases to the Henry Hub index that forms a portion
of the pricing to invoice most of our customers in this segment. Revenue from
cargo sales was $309,030 for the three months ended June 30, 2022 and $285,171
for the three months ended March 31, 2022. Our revenue has been positively
impacted by increases to the Henry Hub index during 2022, and the impact was
more pronounced in the second quarter. The average Henry Hub index pricing used
to invoice our customers increased by 45% for the three months ended June 30,
2022 as compared to the three months ended March 31, 2022.

Total revenue for the Terminals and Infrastructure Segment increased $696,572
for the six months ended June 30, 2022 as compared to the six months ended
June 30, 2021. The increase was primarily driven by increased revenue from LNG
cargo sales to third parties, additional revenue from our investment in CELSEPAR
and increases to the Henry Hub index that forms a portion of the pricing to
invoice most of our customers in this segment. Revenue from cargos sales was
$594,201 for the six months ended June 30, 2022 as compared to $7,211 for the
six months ended June 30, 2021 as we did not have any significant cargo sales
transactions in the first and second quarters of 2021. Our acquisition of our
investment in CELSEPAR in the Mergers occurred on April 15, 2021, and as such,
we have recognized additional revenue in the six months ended June 30, 2022 as
compared to the six months ended June 30, 2021. Finally, the average Henry Hub
index pricing used to invoice our customers increased by 119% for the six months
ended June 30, 2022 as compared to the six months ended June 30, 2021.

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

                                                                               Three Months Ended
(in TBtu)                                                June 30, 2022               March 31, 2022              Change
Old Harbour Facility                                           4.1                          3.0                     1.1
Montego Bay Facility                                           1.7                          0.5                     1.2
San Juan Facility                                              3.0                          1.1                     1.9
Other                                                          0.5                          1.7                    (1.2)
Total volumes delivered in the current period                  9.3                          6.3                     3.0



                                                                               Six Months Ended
(in TBtu)                                                June 30, 2022               June 30, 2021             Change
Old Harbour Facility                                           7.1                            9.4                (2.3)
Montego Bay Facility                                           2.2                            4.1                (1.9)
San Juan Facility                                              4.1                            7.7                (3.6)
Other                                                          2.2                            0.6                 1.6
Total volumes delivered in the current period                 15.6                           21.8                (6.2)



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

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•Volumes delivered at the Old Harbour Facility increased for the three months
ended June 30, 2022 as compared to the three months ended March 31, 2022 due to
an increase in volumes delivered at the Old Harbour Power Plant. Decreased
consumption at the CHP Plant also drove volume decreases at the Old Harbour
Facility for the six months ended June 30, 2022 as compared to the six months
ended June 30, 2021.

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

•The San Juan Power Plant completed additional maintenance activities in the
first quarter of 2022, leading to lower consumption of natural gas. The increase
in volumes delivered at the San Juan Facility for the three months ended June
30, 2022 and the decrease in the six months ended June 30, 2022 were due to
these additional maintenance activities.

Subsequent to the acquisition of our interest in the Sergipe Facility as part of
the Mergers, our share of revenue from our investment in CELSEPAR was $43,576
for the three months ended June 30, 2022 and $63,389 for the three months ended
March 31, 2022, which was primarily comprised of fixed capacity payments
received under CELSE's PPAs. As hydrology conditions have continued to improve
in the second quarter of 2022, the Sergipe Power Plant was not dispatched in the
second quarter of 2022, reducing revenue from our share of our investment in
CELSEPAR. Our share of revenue from our investment in CELSEPAR was $106,965 for
the six months ended June 30, 2022 as compared to $31,769 for the six months
ended June 30, 2021, which represents our share of revenue for the period after
the Merger. The increase was due the investment impacting our results for the
full six months of 2022 as opposed to less than a full quarter of 2021 and
revenue earned from dispatch of the Sergipe Power Plant in the first quarter of
2022.

Cost of sales

Cost of sales includes the procurement of feedgas or LNG, as well as shipping
and logistics costs to deliver LNG or natural gas to our facilities. Our LNG and
natural gas supply are purchased from third parties or converted in our Miami
Facility. 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 $36,416 for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022.


•The increase was primarily due to higher cost and volume of LNG cargo sales in
the market. We recognized $115,432 during the three months ended June 30, 2022
to acquire cargos sold to third parties, as compared to $86,462 for the three
months ended March 31, 2022. Due to the significant increase in market pricing
of LNG in the second half of 2021 and continued increase in the first half of
2022, we have optimized our supply portfolio to sell a portion of our committed
cargos in the market. LNG cargo sales in the market increased by 0.5 TBtus for
the three months ended June 30, 2022. The weighted-average cost of LNG from the
sale of a portion of our cargos also increased from $8.81 per MMBtu for the
three months ended March 31, 2022 to $11.23 per MMBtu for the three months ended
June 30, 2022.

•Cost of LNG purchased from third parties for sale to our customers increased
$33,376 for the three months ended June 30, 2022 as compared to the three months
ended March 31, 2022. The increase was primarily attributable to a 48% increase
in volumes delivered compared to the three months ended March 31, 2022, and a
slight increase in LNG cost. The weighted-average cost of LNG purchased from
third parties increased from $9.49 per MMBtu for the three months ended March
31, 2022 to $9.78 per MMBtu for the three months ended June 30, 2022.

•During the second quarter of 2022, the Sergipe Power Plant was dispatched
substantially less than in the first quarter of 2022 due to improved hydrology
conditions in Brazil. Our share of cost of sales from our investment in
CELSEPAR, which was primarily comprised of LNG costs to fuel the power plant,
was $1,794 for the three months ended June 30, 2022, as compared to $24,742 for
the three months ended March 31, 2022.

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


•We recognized cost to acquire LNG cargos sold to third parties and our share of
cost of sales from our investment in CELSEPAR during the first and second
quarters of 2022, totaling $228,429. We did not have any significant cargo sale
transactions in the first half of 2021, and the acquisition of our investment in
CELSEPAR in the
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Mergers occurred subsequent to March 31, 2021. Accordingly, the increased costs of sales was primarily driven by these transactions.


•Cost of LNG purchased from third parties for sale to our customers increased
$18,100 for the six months ended June 30, 2022 as compared to the six months
ended June 30, 2021. We delivered 10% less volumes to our terminal customers in
the current period as compared to the six months ended June 30, 2021. Our cost
of LNG was significantly higher in the current period, and as such, the increase
of cost of sales to deliver to our terminal customers did not fully correspond
with the decrease in volumes. The weighted-average cost of LNG purchased from
third parties increased from $6.37 per MMBtu for the six months ended June 30,
2021 to $9.66 per MMBtu for the six months ended June 30, 2022.

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

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

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

Vessel operating expenses

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

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


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

Operations and maintenance

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

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

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


•The increase for the six months ended June 30, 2022 as compared to the six
months ended June 30, 2021 was primarily attributable to higher logistics costs
associated with our ISO container distribution system. In the the six months
ended June 30, 2022, we continued to source LNG from our Miami Facility to
service industrial end users in Jamaica due to the reconfiguration and partial
relocation of our assets at the Port of Montego Bay, and we incurred additional
costs to distribute LNG to customers via our ISO container distribution system.

•Additionally, Operations and maintenance increased $11,045 due to the inclusion
of our share of Operations and maintenance from our investment in CELSEPAR from
$5,079 for the six months ended June 30, 2021 to $16,124 for the six months
ended June 30, 2022, which represents the costs for the period after the Merger.
These costs are primarily related to the operation and services agreement for
the Nanook, insurance costs and costs for connecting to the transmission system.
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Ships Segment

                                             Three Months Ended,
(in thousands of $)           June 30, 2022       March 31, 2022        Change
Total revenues               $      111,024      $       114,942      $ (3,918)
Cost of sales                             -                    -             -
Vessel operating expenses            21,288               25,942        (4,654)
Operations and maintenance                -                    -             -
Segment Operating Margin     $       89,736      $        89,000      $    736


                                              Six Months Ended,
(in thousands of $)           June 30, 2022       June 30, 2021        Change
Total revenues               $      225,966      $       95,762      $ 130,204
Cost of sales                             -                   -              -
Vessel operating expenses            47,230              20,175         27,055
Operations and maintenance                -                   -              -
Segment Operating Margin     $      178,736      $       75,587      $ 103,149



Revenue in the Ships segment is comprised of operating lease revenue under time
charters, fees for repositioning vessels as well as the reimbursement of certain
vessel operating costs. We have also recognized revenue related to the interest
portion of lease payments and the operating and service agreements in connection
with the sales-type lease of
the Nanook. We include the interest income earned under sales-type leases as
revenue as amounts earned under chartering and operating service agreements
represent our ongoing ordinary business operations.

At the completion of the Mergers, five of the FSRUs and two LNG carriers were on
hire under long-term charter agreements, and one LNG carriers, the Grand, was
operating in the spot market. In the third quarter, the Grand, began to be
utilized in our terminal and logistics operations, and as such, the results of
operations of the Grand are included in the Terminals and Infrastructure segment
from the third quarter of 2021 onward. The Spirit and the Mazo continue to be in
cold lay-up, and no vessel charter revenue was generated from these vessels.

Total revenue


Total revenue for the Ships segment decreased $3,918 for the three months ended
June 30, 2022 as compared to the three months ended March 31, 2022. The decrease
was primarily driven by lower revenue as a result of one FSRU being off-hire as
the vessel transitions between charters; the new charter is expected to commence
prior to the end of 2022. The decrease was partially offset by improved results
from one of our vessels in the Cool Pool.

Total revenue for the Ships segment increased $130,204 for the six months ended
June 30, 2022 as compared to the six months ended June 30, 2021. We completed
the Mergers, including all of the vessels comprising the Ships segment, on April
15, 2021, and the increase in revenue is due to the inclusion of the Ships
segment in our results of operations for a full six months as opposed to less
than a full quarter in the prior year comparable period.

Vessel operating expenses


Vessel operating expenses include direct costs associated with operating a
vessel, such as crewing, repairs and maintenance, insurance, stores, lube oils,
communication expenses, management fees and costs to operate the Hilli. We also
recognize voyage expenses within Vessel operating expenses, which principally
consist of fuel consumed before or after the term of time charter or when the
vessel is off hire. Under time charters, the majority of voyage expenses are
paid by customers. To the extent that these costs are a fixed amount specified
in the charter, which is not dependent upon redelivery location, the estimated
voyage expenses are recognized over the term of the time charter.

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

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

Other operating results

                                                  Three Months Ended,                                                  Six Months Ended,
(in thousands of $)            June 30, 2022           March 31, 2022            Change             June 30, 2022           June 30, 2021            Change
Selling, general and
administrative               $       50,310          $        48,041          $    2,269          $       98,351          $       78,152          $  20,199
Transaction and integration
costs                                 4,866                    1,901               2,965                   6,767                  40,716            (33,949)
Depreciation and
amortization                         36,356                   34,290               2,066                  70,646                  36,886             33,760
Asset impairment expense             48,109                        -              48,109                  48,109                       -             48,109
Total operating expenses            139,641                   84,232              55,409                 223,873                 155,754             68,119
Operating income (loss)             133,695                  166,456             (32,761)                300,151                 (34,548)           334,699
Interest expense                     47,840                   44,916               2,924                  92,756                  50,162             42,594
Other (income), net                 (22,102)                 (19,725)             (2,377)                (41,827)                 (8,058)           (33,769)

Net income (loss) before
income from equity method
investments and income taxes        107,957                  141,265             (33,308)                249,222                 (76,652)           325,874
(Loss) income from equity
method investments                 (372,927)                  50,235            (423,162)               (322,692)                 38,941           (361,633)
Tax (benefit) provision             (86,539)                 (49,681)            (36,858)               (136,220)                  3,532           (139,752)
Net (loss) income            $     (178,431)         $       241,181          $ (419,612)         $       62,750          $      (41,243)         $ 103,993

Selling, general and administrative


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

Selling, general and administrative increased $2,269 for the three months ended
June 30, 2022, as compared to the three months ended March 31, 2022. The
increase was primarily attributable to higher payroll costs, screening costs and
professional fees due to the continued expansion of our operations as compared
to the first quarter of 2022.

Selling, general and administrative increased $20,199 for the six months ended
June 30, 2022, as compared to the six months ended June 30, 2021. The increase
was primarily attributable to higher payroll and professional fees associated
with the continued expansion of our operations.

Transaction and integration costs


For the three months ended June 30, 2022, we incurred $4,866 for transaction and
integration costs, as compared to $1,901 for the three months ended March 31,
2022. For the three months ended June 30, 2022, we incurred transaction and
integration costs in connection with the Sergipe Sale, which consisted primarily
of financial advisory, legal accounting and consulting costs.

For the six months ended June 30, 2022, we incurred $6,767 for transaction and
integration costs, as compared to $40,716 for the six months ended June 30,
2021. For the six months ended June 30, 2021, we incurred in transaction and
integration costs in connection with the Sergipe Sale, which consisted primarily
of financial advisory, legal accounting and consulting costs and to a lesser
extent integration costs from the Mergers as the integration of GMLP and Hygo
has progressed since the acquisition date.
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Depreciation and amortization


Depreciation and amortization increased $2,066 for the three months ended June
30, 2022 as compared to the three months ended March 31, 2022. For the three
months ended June 30, 2022, we incurred higher amortization of favorable and
unfavorable contracts and permits.

Depreciation and amortization increased $33,760 for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021. The increase was primarily due to the following:


•Subsequent to the completion of the Mergers, our results of operations include
depreciation expense primarily for the vessels acquired for a full six months as
opposed to less than a full quarter in the prior year comparable period. We
recognized $18,483 of incremental depreciation expense for the acquired vessels
during the six months ended June 30, 2022.

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

Asset impairment expense

As a result of the Hygo Merger, we recognized long-lived assets associated the expansion of the Sergipe Power Plant. In the second quarter of 2022, we recognized asset impairment expense of $48,109, as the fair value of these assets was less than the carrying value and the asset group was held for sale.

Interest expense


Interest expense increased by $2,924 for the three months ended June 30, 2022 as
compared to the three months ended March 31, 2022. The increase was primarily
due an increase in total principal outstanding due to draws on the Revolving
Facility (defined in our Annual Report) and borrowings under the South Power
2029 Bonds (defined below); principal balance on outstanding facilities was
$4,191,026 as of June 30, 2022 as compared to total outstanding debt of
$3,978,250 as of March 31, 2022.

Interest expense increased by $42,594 for the six months ended June 30, 2022, as
compared to the six months ended June 30, 2021. The increase was primarily due
to an increase in total principal outstanding due to draws on the Revolving
Facility, borrowings under the Vessel Term Loan Facility (defined in our Annual
Report) and the South Power 2029 Bonds, all occurring after June 30, 2022;
principal balance on outstanding facilities was $4,191,026 as of June 30, 2022
as compared to total outstanding debt of $3,527,297 as of June 30, 2021.
Interest expense also increased due to debt assumed in the Mergers, which were
completed on April 15, 2021.

Other (income), net

Other (income), net was $(22,102) and $(19,725) for the three months ended June
30, 2022 and March 31, 2022, respectively. Other (income), net was $(41,827) and
$(8,058) for the six months ended June 30, 2022 and June 30, 2021, respectively.
Other (income) recognized in the three and six months ended June 30, 2022 was
primarily comprised of the following:

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


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

Tax provision

We recognized a tax benefit for the three months ended June 30, 2022 of $86,539
compared to a tax benefit of $49,681 for the three months ended March 31, 2022.
We recognized a tax benefit for the six months ended June 30, 2022 of $136,220
compared to a tax provision of $3,532 for the six months ended June 30, 2021.

The tax benefits recognized in the three and six months ended June 30, 2022 were
primarily driven by the remeasurement of a deferred income tax liability in
conjunction with an internal reorganization and the impairment of our investment
in CELSEPAR. Our equity method investment in CELSEPAR is now directly held by a
subsidiary domiciled in the United Kingdom; the investment was previously held
by a subsidiary domiciled in Brazil resulting in a discrete tax
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benefit of $76,460 recognized in the first quarter of 2022. Additionally, in the
second quarter of 2022, we recognized an other-than-temporary impairment
("OTTI") on the value of this investment, resulting in a further discrete
benefit of $100,627.This increase in tax benefit for the three and six months
ended June 30, 2022 was partially offset by an increase in pretax income for
certain profitable operations, including GMLP and Hygo.

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

(Loss) income from equity method investments


We recognized loss and income from our investments in Hilli and CELSEPAR of
$372,927 and $50,235 for the three months ended June 30, 2022 and March 31,
2022, respectively. In connection with the Sergipe Sale, we recognized an other
than temporary impairment of the investment in CELSEPAR of $345,447. Our share
of earnings from CELSEPAR was also significantly impacted by a foreign currency
remeasurement loss of $28,788 for the three months ended June 30, 2022 as a
result of the remeasurement of the Nanook finance lease obligation, as compared
to a remeasurement gain of $42,466 for the three months ended March 31, 2022.

We recognized loss from our investments in Hilli and CELSEPAR of $322,692 for
the six months ended June 30, 2022. For the six months ended June 30, 2021,
during the period after the completion of the Mergers, we recognized income from
our investments in Hilli and CELSEPAR of $38,941. In connection with the Sergipe
Purchase and Sale, we recognized an other than temporary impairment of the
investment in CELSEPAR of $345,447. Our share of earnings from CELSEPAR was
significantly impacted by a foreign currency remeasurement gain of $13,678 for
the six months ended June 30, 2022 as a result of the remeasurement of the
Nanook finance lease obligation, as compared to a remeasurement gain of $25,776
during the period after the Mergers for the six months ended June 30, 2021.

Factors Impacting Comparability of Our Financial Results

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


•Our historical financial results do not reflect the recently announced Sergipe
Sale and Vessel Financing Transaction. After the completion of the Sergipe Sale
expected in the fourth quarter of 2022, we will no longer include the results of
our equity method investment in CELSEPAR in our financial statements. For the
three and six months ended June 30, 2022, we recognized losses of $389,996 and
$353,315, respectively, in Loss (income) from equity method investments in our
condensed consolidated statements of operations and comprehensive income (loss).
The results of operations of the Sergipe Power Plant have also been included in
our Terminal and Infrastructure segment results, contributing segment operation
margin of $32,732 and $64,305 for the three and six months ended June 30, 2022,
respectively. Finally, we recognized an other than temporary impairment on our
investment in CELSEPAR in the second quarter of 2022 of $345,447, which would
not recur after the Sergipe Sale is completed.

We expect to complete the Vessel Financing Transaction in the third quarter of
2022. Upon the completion of this transaction, the majority of proceeds received
will be reflected as additional financing on our condensed consolidated balance
sheet, increasing our interest expense in future periods.

•Our historical financial results do not reflect new LNG supply agreements, as
well as our Fast LNG solution that will lower the cost of our LNG supply. We
currently purchase the majority of our supply of LNG from third parties,
sourcing approximately 96% of our LNG volumes from third parties for the six
months ended June 30, 2022. We have entered into LNG supply agreements at a
price indexed to Henry Hub through 2030, resulting in expected pricing below the
pricing in our previous long-term supply agreement. We have entered into supply
agreements to secure supply of LNG volumes equal to approximately 100% of our
expected needs for our Montego Bay Facility, Old Harbour Facility, San Juan
Facility, La Paz Facility and Puerto Sandino Facility for the next six years;
pricing under these agreements is indexed to Henry Hub, resulting in expected
pricing below our historical supply agreements. We also 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.

Since August 2021, LNG prices have increased materially. Due to this significant
increase in market pricing of LNG, we have optimized our supply portfolio to
sell a portion of our committed cargos in the market with delivery throughout
2022, and these cargo sales are expected to increase our 2022 revenues and
results of operations.
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•Our historical financial results do not include significant projects that are
near completion or in development. Our results of operations for the three and
six months ended June 30, 2022 include our Montego Bay Facility, Old Harbour
Facility, San Juan Facility, certain industrial end-users and our Miami
Facility. We recently placed a portion of our La Paz Facility into service, and
in the fourth quarter of 2021, our revenue and results of operations began to be
impacted by operations in Mexico. We are continuing to develop of our La Paz
Power Plant and our Puerto Sandino Facility, and our current results do not
include revenue and operating results from these projects. Our current results
also exclude other developments, including the Barcarena Facility, Santa
Catarina Facility and Ireland Facility.

Liquidity and Capital Resources


We believe we will have sufficient liquidity from proceeds from recent
borrowings, access to additional capital sources and cash flow from operations
to fund our capital expenditures and working capital needs for the next 12
months and the reasonably foreseeable future. We expect to fund our current
operations and continued development of additional facilities through cash on
hand, borrowings under our debt facilities, the completion of the Sergipe Sale,
the completion of the Vessel Financing Transaction and cash generated from
operations. We may also opportunistically elect to generate additional liquidity
through future debt or equity issuances and asset sales to fund developments and
transactions. We have historically funded our developments through proceeds from
our IPO and debt and equity financing, most recently as follows (below terms
defined in our Annual Report):

•In September 2020, we issued $1,000,000 of 2025 Notes and repaid all other
outstanding debt. No principal payments are due on the 2025 Notes until maturity
in 2025.

•In December 2020, we received proceeds of $263,125 from the issuance of
$250,000 of additional notes on the same terms as the 2025 Notes (subsequent to
this issuance, these additional notes are included in the definition of 2025
Notes herein).

•In December 2020, we issued 5,882,352 shares of Class A common stock and received proceeds of $290,771, net of $1,221 in issuance costs.


•In April 2021, we issued $1,500,000 of 2026 Notes; we also entered into the
$200,000 Revolving Facility that has a term of approximately five years. In
February and May 2022, we amended the Revolving Facility to increase the
borrowing capacity by $115,000 and $125,000, respectively, for a total capacity
under the Revolving Facility of $440,000.

•In August 2021, we entered into the CHP Facility and initially drew $100,000,
which may be increased to $285,000. In January 2022, we agreed to rescind the
CHP Facility and entered into an agreement for the issuance of secured bonds.
Amounts outstanding at the time of the mutual rescission of the CHP Facility of
$100,000 were credited towards the purchase price of the South Power 2029 Bonds
(defined below). Through June 30, 2022, we have received proceeds of $221,845
from the issuance of South Power 2029 Bonds.

•In September 2021, Golar Partners Operating LLC, our indirect subsidiary,
closed on the Vessel Term Loan Facility. Under this facility, we borrowed an
initial amount of $430,000, which may be increased to $725,000, subject to
satisfaction of certain conditions including the provision of security in
relation to additional vessels.

We have assumed total committed expenditures for all completed and existing
projects to be approximately $2,057 million, with approximately $1,727 million
having already been spent through June 30, 2022. This estimate represents the
committed expenditures for our Fast LNG project, as well as committed
expenditures necessary to complete the La Paz Facility, Puerto Sandino Facility,
the Barcarena Facility, Santa Catarina Facility and the Sri Lanka Facility. We
expect to be able to fund all such committed projects with a combination of cash
on hand, cash flows from operations and proceeds from the South Power 2029
Bonds. We will also expect to fund future Fast LNG development with proceeds
received from the Sergipe Sale and Vessel Financing Transaction. We may also
enter into other financing arrangements to generate proceeds to fund our
developments.

As of June 30, 2022, we have spent approximately $128 million to develop the
Pennsylvania Facility. Approximately $22 million of construction and development
costs have been expensed as we have not issued a final notice to proceed to our
engineering, procurement and construction contractors. Cost for land, as well as
engineering and equipment that could be deployed to other facilities and
associated financing costs of approximately $106 million, has been capitalized,
and to date, we have repurposed approximately $17 million of engineering and
equipment to our Fast LNG project. We intend to apply for updated permits for
the Pennsylvania Facility with the aim of obtaining these permits to coincide
with the commencement of construction activities.
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Table of Contents

Contractual Obligations

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 December 31, 2021. There were no significant changes to our contractual obligations in the first half of 2022.


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

Long-term debt obligations $ 4,936,353 $ 305,575

   $    878,471          $ 3,341,677          $   410,630
Purchase obligations                   5,265,356              784,060             1,637,783            1,450,817            1,392,696
Lease obligations                        420,329               67,131               101,295               68,393              183,510
Total                               $ 10,622,038          $ 1,156,766          $  2,617,549          $ 4,860,887          $ 1,986,836


Long-term debt obligations


For information on our long-term debt obligations, see "-Liquidity and Capital
Resources-Long-Term Debt." The amounts included in the table above are based on
the total debt balance, scheduled maturities, and interest rates in effect as of
December 31, 2021.

Purchase obligations

We are party to contractual purchase commitments for the purchase, production
and transportation of LNG and natural gas, as well as engineering, procurement
and construction agreements to develop our terminals and related infrastructure.
Our commitments to purchase LNG and natural gas are principally take-or-pay
contracts, which require the purchase of minimum quantities of LNG and natural
gas, and these commitments are designed to assure sources of supply and are not
expected to be in excess of normal requirements. 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 December 31, 2021. We have secured
supply of LNG for approximately 100% of our expected needs for our Montego Bay
Facility, Old Harbour Facility, San Juan Facility, La Paz Facility and Puerto
Sandino Facility for the next six years.

We have construction purchase commitments in connection with our development
projects, including the La Paz Facility, Puerto Sandino Facility, Barcarena
Facility, Santa Catarina Facility, as well as our Fast LNG solution. Commitments
included in the table above include commitments under engineering, procurement
and construction contracts where a notice to proceed has been issued.

Lease obligations


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 and a land lease.

As of December 31, 2021, we had seven vessels under time charter leases with
remaining non-cancellable terms ranging from one month to ten years. The lease
commitments in the table above include only the lease component of these
arrangements due over the non-cancellable term and does not include any
operating services. We have executed a lease for an LNG carrier that has not
commenced as of December 31, 2021, which has a noncancelable terms of seven
years and includes fixed payments of approximately $198,100; these payments are
not included in the table above.

We have leases for port space and a land site for the development of our
facilities. Terms for leases of port space range from 20 to 25 years. The land
site lease is held with an affiliate of the Company and has a remaining term of
approximately five years with an automatic renewal term of five years for up to
an additional 20 years.

During 2020, we executed multiple lease agreements for the use of ISO tanks, and
we began to receive these ISO tanks and the lease terms commenced during the
second quarter of 2021. The lease term for each of these leases is five years
and expected payments under these lease agreements have been included in the
above table.

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

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Table of Contents

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