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, 2020 (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 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 similar 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. When used in a historical context that is prior to the completion of NFE's initial public offering ("IPO"), "Company," "we," "our," "us" or like terms refer to New Fortress Energy Holdings LLC, a Delaware limited liability company ("New Fortress Energy Holdings"), our predecessor for financial reporting purposes.

Overview

We are a global integrated gas-to-power infrastructure company that seeks to use natural gas to satisfy the world's large and growing power needs. We deliver targeted energy solutions to customers around the world, thereby reducing their energy costs and diversifying their energy resources, while also reducing pollution and generating compelling margins. 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 the Annual Report, "Items 1 and 2: Business and Properties" under "Toward a Carbon-Free Future".

As an integrated gas-to-power energy infrastructure company, our business model spans 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. We expect that control of our vertical supply chain, from procurement to delivery of LNG, will help to reduce our exposure to future LNG price variations and enable us to supply our existing and future customers with LNG at a price that reinforces our competitive standing in the LNG market. Our strategy is simple: we seek to procure LNG at attractive prices using long-term agreements and through our own production, and we seek to sell natural gas (delivered through LNG infrastructure) or gas-fired power to customers that sign long-term, take-or-pay contracts.

Our Current Operations

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 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 our expanded delivery logistics chain in Northern Pennsylvania (the "Pennsylvania Facility").



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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 740,000 gallons of LNG (61,000 MMBtu) 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 commenced commercial operations in June 2019 and is capable of processing approximately six million gallons of LNG (500,000 MMBtu) per day. The Old Harbour Facility supplies natural gas to the new 190MW Old Harbour power plant (the "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 (the "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. On March 3, 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

In July 2020, we finalized the development of the San Juan Facility. The San Juan Facility is near the San Juan Power Plant and serves as our supply hub for the San Juan Power Plant and other industrial end-user customers in Puerto Rico. We have delivered natural gas used for the commissioning of PREPA's power plant under the Fuel Sale and Purchase Agreement with PREPA since April 2020. See "-Other Matters" for additional information regarding our San Juan Facility.

Miami Facility

Our Miami Facility began operations in April 2016. This facility has liquefaction capacity of approximately 100,000 gallons of LNG (8,300 MMBtu) 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.

Suape Development

On January 12, 2021, we acquired CH4 Energia Ltda., an entity that owns key permits and authorizations to develop an LNG terminal and up to 1.37GW of gas-fired power at the Port of Suape in Brazil. On March 11, 2021, we acquired 100% of the outstanding shares of Pecém Energia S.A. ("Pecém") and Energetica Camacari Muricy II S.A. ("Muricy"). These companies collectively hold certain 15-year power purchase agreements totaling 288 MW for the development of the thermoelectric power plants in the State of Bahia, Brazil. We will seek to obtain the necessary approvals from ANEEL and other relevant regulatory authorities in Brazil to transfer the site for the power purchase agreements to the Port of Suape and update the technical characteristics in order to develop and plan to construct a 288MW gas-fired power plant and LNG import terminal at the Port of Suape to provide LNG and natural gas to major energy consumers within the port complex and across the greater Northeast region of Brazil.

Other Development Projects

We are in the process of developing an LNG regasification facility and power plant at the Port of Pichilingue in Baja California Sur, Mexico (the "La Paz Facility"). Initially, the La Paz Facility is expected to supply approximately 270,000 gallons of LNG (22,300 MMBtu) per day under an intercompany GSA for approximately 100 MW of power supplied by gas-fired modular power units that we plan to develop, own and operated, which may be increased to approximately 350,000 gallons (29,000 MMBtu) of LNG per day for up to 135 MW of power. In addition, we recently executed an agreement with CFEnergia for the supply of natural gas to power plants located in Punta Prieta and Coromuel for an estimated 250,000 gallons of LNG (20,700 MMBtu) per day.

We are also in the process of developing an LNG regasification facility and power plant in Puerto Sandino, Nicaragua (the "Puerto Sandino Facility"). In February 2020, we entered into a 25-year PPA with Nicaragua's electricity distribution companies, and we are in the process of constructing an approximately 300 MW natural gas-fired power plant that will consume approximately 700,000 gallons of LNG (57,500 MMBtus) per day.

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



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Recent Developments: Hygo and GMLP Acquisitions

On April 15, 2021, the Company completed the previously announced acquisitions of Hygo Energy Transition Ltd. ("Hygo") and Golar LNG Partners LP ("GMLP"); referred to as the "Hygo Merger" and "GMLP Merger," respectively and, collectively, the "Mergers". NFE paid $580 million in cash and issued 31,372,549 shares of Class A common stock to Hygo's shareholders in connection with the Hygo Merger. NFE paid $3.55 per each common unit of GMLP outstanding and for each of the outstanding membership interest of GMLP's general partner, totaling $251 million.

As a result of the Hygo Merger we acquired one operating FSRU terminal in Sergipe, Brazil (the "Sergipe Facility"), a 50% interest in a 1.5G GW power plant in Sergipe, Brazil (the "Sergipe Power Plant"), as well as two other FSRU terminals in development in Pará, Brazil (the "Barcarena Facility") and Santa Catarina, Brazil (the "Santa Catarina Facility"). In addition, we acquired Hygo's vessel fleet, which consists of the Golar Nanook, a newbuild FSRU moored and in service at the Sergipe Facility, and two operating LNG carriers, the Golar Celsius and the Golar Penguin, which may be converted into FSRUs.

As a result of the GMLP Merger we acquired a fleet of six FSRUs, four LNG carriers and an interest in a floating liquefaction vessel, the Hilli, which receives, liquefies and stores LNG at sea and transfers it to LNG carriers that berth while offshore, each of which are expected to help support our existing facilities and international project pipeline. The majority of the FSRUs in GMLP's fleet are operating in Brazil, Kuwait, Indonesia, Jamaica and Jordan under time charters. GMLP's uncontracted vessels are available for short term employment in the spot market.

Cash consideration for the GMLP Merger was funded from proceeds from a private offering of $1.5 billion aggregate principal amount of senior secured notes due 2026 (the "2026 Notes") completed on April 12, 2021. The 2026 Notes bear interest at 6.50% per annum and were issued at an issue price equal to 100% of principal. On April 15, 2021, we also entered into a $200 million senior secured revolving facility (the "Revolving Facility"). The Revolving Facility has a term of approximately five years and bears interest based on the three-month LIBOR rate plus certain margins.

COVID-19 Pandemic

We are closely monitoring the impact of the novel coronavirus ("COVID-19") pandemic on all aspects of our operations and development projects. We primarily operate under long-term contracts with customers, many of which contain fixed minimum volumes that must be purchased on a "take-or-pay" basis. We have continued to invoice our customers for these 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.

Based on the essential nature of the services we provide to support power generation facilities, our 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. For the three months ended March 31, 2021, we have incurred approximately $0.4 million 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 and daily operations from the COVID-19 pandemic; however, there are important uncertainties including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. 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

We received an order from FERC on June 18, 2020, which asked us to explain why our San Juan Facility is not subject to FERC's jurisdiction under section 3 of the Natural Gas Act. While 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, 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, have sought rehearing of the March 19, 2021 FERC order and such rehearing requests remain pending before FERC. FERC's orders in the proceeding would be subject to subsequent judicial review.



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Results of Operations - Three Months Ended March 31, 2021 compared to Three
Months Ended March 31, 2020

                                                                Three Months Ended March 31,
                                                               2021          2020         Change
Revenues
Operating revenue                                           $   91,196     $  63,502     $ 27,694
Other revenue                                                   54,488        11,028       43,460
Total revenues                                                 145,684        74,530       71,154
Operating expenses
Cost of sales                                                   96,671        68,216       28,455
Operations and maintenance                                      16,252         8,483        7,769
Selling, general and administrative                             45,181        28,538       16,643
Contract termination charges and loss on mitigation sales            -           208         (208 )
Depreciation and amortization                                    9,890         5,254        4,636
Total operating expenses                                       167,994       110,699       57,295
Operating loss                                                 (22,310 )     (36,169 )     13,859
Interest expense                                                18,680        13,890        4,790
Other (income) expense, net                                       (604 )         611       (1,215 )
Loss on extinguishment of debt, net                                  -         9,557       (9,557 )
Loss before taxes                                              (40,386 )     (60,227 )     19,841
Tax (benefit)                                                     (877 )          (4 )       (873 )
Net loss                                                    $  (39,509 )   $ (60,223 )   $ 20,714



Revenues

Operating revenue from the sale of LNG, natural gas or outputs from our natural gas-fired power generation facilities increased $27,694 for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. The increase was primarily driven by increases in volumes sold from the Old Harbour Facility, including volumes utilized in the CHP Plant which commenced commercial operations during March 2020:

• For the three months ended March 31, 2021, we recognized $51,644 of revenue


   from volumes sold at the Old Harbour Facility, as compared to $35,777 for the
   three months ended March 31, 2020, including additional revenue of $16,830 from
   natural gas utilized in the CHP Plant and Jamalco's boilers. For the three
   months ended March 31, 2021, the volume delivered to the Old Harbour Facility
   was 53.0 million gallons (4.4 TBtu). For the three months ended March 31, 2020,
   the volume delivered to the Old Harbour Facility was 42.1 million gallons (3.5
   TBtu). The increase in volumes from sales to the Old Harbour Facility was
   primarily due to volumes delivered to the CHP Plant and Jamalco's boilers
   increasing by 15.7 million gallons (1.3 TBtu) to 25.5 million gallons (2.1
   TBtu) from 9.8 million gallons (0.8 TBtu) in the three months ended March 31,
   2020.


• Revenue from the delivery of power and steam, which began during March 2020,


   under our contracts with JPS and Jamalco of $7,136 for the three months ended
   March 31, 2021 as compared to $1,731 in revenue for the three months ended
   March 31, 2020.


Operating revenue was also impacted by operations at our Montego Bay Facility. Sales at the Montego Bay Facility increased by $1,956 from $22,823 for the three months ended March 31, 2020 to $24,779 for the three months ended March 31, 2021. The increase in sales at the Montego Bay Facility was primarily due to an increase in sales to industrial end-user customers, offset by a minor decrease in consumption by the Bogue Power Plant. Volumes delivered at the Montego Bay Facility remained relatively consistent for the three months ended March 31, 2021 as compared to the three months ended March 31, 2021, increasing by 0.1 million gallons (0.0 TBtu) from 23.5 million gallons (2.0 TBtu) during the three months ended March 31, 2020 to 23.6 million gallons (2.0 TBtu) during the three months ended March 31, 2021.



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Table of Contents Other revenue includes revenue from development services, which is recognized from the construction, installation and commissioning of equipment to transform customers' facilities to operate utilizing natural gas or to allow customers to receive power or other outputs from our power generation facilities, and such services are included within certain long-term contracts to supply these customers with natural gas or outputs from our natural gas-fired facilities. Other revenue increased $43,460 for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, and the increases were due to an increase in revenue for development services in Puerto Rico for the three months ended March 31, 2021, including gas used by our customer for testing and commissioning their assets. Development services revenue recognized in the three months ended March 31, 2021 included $45,618 for the customer's use of 48.7 million gallons (4.0 TBtu) of natural gas as part of commissioning their assets. The increase was partially offset by a decrease in development services revenue of $1,033 related to conversion of the customer's infrastructure within the San Juan Power Plant.

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, power generation facilities or to our customers. 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 $28,455 for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020.

Cost of LNG purchased from third parties for sale to our customers or delivered for commissioning of our customer's assets in Puerto Rico increased $22,454 for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. The increase was primarily attributable to an 89% increase in volumes delivered, inclusive of volumes delivered from our Miami Facility, compared to the three months ended March 31, 2020, partially offset by the decrease in LNG cost. The weighted-average cost of LNG purchased from third parties and delivered decreased from $0.67 per gallon ($8.10 per MMBtu) for the three months ended March 31, 2020 to $0.51 per gallon ($6.17 per MMBtu) for the three months ended March 31, 2021. The weighted-average cost of our inventory balance as of March 31, 2021 and December 31, 2020 was $0.55 per gallon ($6.63 per MMBtu) and $0.40 per gallon ($4.81 per MMBtu), respectively.

Charter costs increased Cost of sales by $2,241 for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. The increase was attributable to an additional vessel in our fleet associated with our San Juan Facility after our assets were placed in service in the third quarter of 2020, as well as credits received in the first quarter of 2020 that did not recur in the first quarter of 2021.

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 for the three months ended March 31, 2021 was $16,252, which increased $7,769 from $8,483 for the three months ended March 31, 2020. The increase was primarily the result of operating facilities in the first quarter of 2021 that were still in development or had just commenced commercial operations in the first quarter of 2020. Operations and maintenance increased by the costs of operating the San Juan Facility of $3,206 and an increase in the cost to operate the CHP Plant of $1,844. Higher maintenance costs of $1,352 also contributed to the increased operations and maintenance costs for the three months ended March 31, 2021.

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 costs associated with development activities for projects that are in initial stages and development is not yet probable.

Selling, general and administrative for the three months ended March 31, 2021, was $45,181 which increased $16,643 from $28,538 for the three months ended March 31, 2020. The increase was primarily attributable to $11,563 of professional services costs and other costs associated with the Mergers. The increase was also attributable to $4,050 of higher payroll costs associated with increased headcount, partially offset by reductions to other administrative costs.

Contract termination charges and loss on mitigation sales

Loss on mitigation sales for the three months ended March 31, 2021 and 2020 was $0 and $208, respectively. In the first quarter of 2020, we incurred losses associated with undelivered quantities of LNG under firm purchase commitments due to storage capacity constraints. In these situations, our supplier will attempt to sell the undelivered quantity through a mitigation sale, and the losses incurred under the firm purchases are partially offset by this sale of the undelivered amount to third parties for amounts lower than the contracted price, which resulted in a loss of $208. We did not have such transactions during the three months ended March 31, 2021.



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Depreciation and amortization

Depreciation and amortization increased $4,636 for the three months ended March 31, 2021. The increase was primarily due to the following:

• Increase in depreciation of $2,207 for the CHP Plant that went into service in

March 2020;

• Increase in depreciation of $2,385 for the San Juan Facility that went into


   service in July 2020.



Interest expense

Interest expense for the three months ended March 31, 2021 was $18,680, which increased $4,790 from $13,890 for the three months ended March 31, 2020, primarily as a result of decreased capitalization of interest as both our CHP Plant and our San Juan Facility were placed into service in 2020, as well as higher principal balances outstanding during 2021. The increase in expense was partially offset by a reduction to the amortization of financing costs.

Other (income) expense, net

Other income, net for the three months ended March 31, 2021 was $604, which increased $1,215 from expense of $611 for the three months ended March 31, 2020, primarily as a result of the unrealized loss on our investment in equity securities of $2,400 in the first quarter of 2020 that did not recur in the first quarter of 2021. We also recognized income from the change in fair value of the derivative liability and equity agreement associated with our acquisition of Shannon LNG.

Loss on extinguishment of debt, net

Loss on extinguishment of debt for the three months ended March 31, 2020 was $9,557 as a result of the extinguishment of the Term Loan Facility in January 2020. We did not have such transactions during the three months ended March 31, 2021.

Tax (benefit)

We recognized a tax benefit for the three months ended March 31, 2021 of $877, compared to tax benefit of $4 for the three months ended March 31, 2020. The increase in benefit for the three months ended March 31, 2021 was primarily driven by the release of a valuation allowance in a foreign jurisdiction resulting in a discrete benefit of $3,010, partially offset by income tax expense recorded for certain profitable foreign operations. The Company determined that the valuation allowance should be released based on forecasted pre-tax profits in this jurisdiction.

During 2020, the CHP Plant began operations and we placed our assets at the San Juan Facility in service. Certain of our Jamaican operations had increased earnings for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020 without any historical net operating losses to offset additional tax expense. During the third quarter of 2020, we placed our assets at the San Juan Facility into service, and since that point, we have recognized tax expense in Puerto Rico at a preferential tax rate due to our tax decree resulting in an effective tax rate lower than the U.S. federal income tax rate. We continue to have valuation allowances in many of our foreign jurisdictions and tax expense for earnings generated in many foreign jurisdictions has been limited.

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 include significant projects that have


   recently been completed or are near completion. Our results of operations for
   the three months ended March 31, 2021 include our Montego Bay Facility, Old
   Harbour Facility, San Juan Facility, certain industrial end-users and our Miami
   Facility. We are finalizing development of our La Paz Facility 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, but not limited to, potential developements in Brazil
   and the Ireland Facility.



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• Our historical financial results do not reflect new LNG supply agreements that

will lower the cost of our LNG supply through 2030. We currently purchase the

majority of our supply of LNG from third parties, sourcing approximately 97% of

our LNG volumes from third parties for the three months ended March 31, 2021, a

significant portion of which is under an LNG supply agreement signed in 2018.

During 2020, we also entered into four LNG supply agreements for the purchase

of approximately 415 TBtu of LNG at a price indexed to Henry Hub from 2021 and

2030, resulting in expected pricing below the pricing in our previous long-term

supply agreement.

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.

• Our historical financial results do not include the acquisitions of Hygo and


   GMLP as well as transaction and integration costs expected to be incurred
   associated with these acquisitions. Upon completion of the acquisition of Hygo,
   we acquired the Sergipe Facility, a 50% interest in the Sergipe Power Plant, as
   well as the Barcarena Facility and the Santa Catarina Facility that are
   currently in development. In addition, we acquired one FSRU in service at the
   Sergipe Facility and two operating LNG carriers which may be converted into
   FSRUs. Upon completion of the acquisition of GMLP, we acquired a fleet of six
   FSRUs, four LNG carriers and an interest in a floating liquefaction vessel. The
   results of operations of Hygo and GMLP will begin to be included in our
   financial statements upon the closing of the acquisitions in the second quarter
   of 2021. Our results of operations in 2021 will also include transaction costs
   associated with these acquisitions as well as costs incurred to integrate the
   operations of Hygo and GMLP into our business, which may be significant.


Liquidity and Capital Resources

We believe we will have sufficient liquidity from proceeds from recent borrowings, access to additional capital sources and cash flow from operations to fund our capital expenditures and working capital needs for the next 12 months. We expect to fund our current operations and continued development of additional facilities through cash on hand, borrowings under our Revolving Facility and cash generated from operations. We may also elect to generate additional liquidity through future debt or equity issuances or debt refinancings to fund developments and transactions. We have historically funded our developments through proceeds from our IPO and debt and equity financing as follows:

• In January 2020, we borrowed $800,000 under a credit agreement, and repaid our

prior term loan facility in full.

• 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.

On April 12, 2021, we issued $1.5 billion of 2026 Notes. The 2026 Notes bear interest at 6.50% per annum and were issued at an issue price equal to 100% of principal. No principal payments are due on the 2026 Notes until maturity in 2026. The Company used the net proceeds from this offering to fund the cash consideration for the GMLP Merger and pay related fees and expenses. On April 15, 2021, we entered into the $200 million Revolving Facility that has a term of approximately five years and bears interest based on the three-month LIBOR rate plus certain margins.

We have assumed total expenditures for all completed and existing projects to be approximately $1,239 million, with approximately $839 million having already been spent through March 31, 2021. This estimate represents the expenditures necessary to complete the La Paz Facility and the Puerto Sandino Facility, expected expenditures to serve new industrial end-users and other planned capital expenditures. We expect to be able to fund all such committed projects with a combination of cash on hand, cash flows from operations and borrowings under our Revolving Facility. We may also seek to fund our developments through debt refinancings. We are currently exploring the potential refinancing of the Golar Nanook with a sale-leaseback or similar financing. We cannot assure whether any such refinancing will occur. Through March 31, 2021, we have spent approximately $144 million to develop the Pennsylvania Facility. Approximately $21 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 $123 million, has been capitalized.



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Table of Contents Certain of the debt facilities of each of Hygo and GMLP or their respective subsidiaries remained outstanding following the closing of the Mergers. The following is a description of the debt facilities for each of Hygo and GMLP that remain outstanding following the closing of the Mergers. In the future, we will need to repay or refinance this additional indebtedness which could adversely affect our liquidity and capital resources. There can be no assurances that we will be able to refinance this indebtedness on favorable terms or at all.

Hygo Debt

Sergipe Debt Financing

To finance construction of the Sergipe Facility and the Sergipe Power Plant, in April 2018, CELSE-Centrais Elétricas de Sergipe S.A. ("CELSE") signed financing agreements with amounts made available by banks and multilateral organizations throughout 2018 and 2019 (the "CELSE Facility"). As of December 31, 2020, amounts outstanding and the effective interest rates under the CELSE Facility were as set forth below. Principal and interest payments are due each October and April, beginning October 2020. The CELSE Facility matures in April 2032.



                                                   Amount             Effective

Credit facility (Real and USD in millions) Outstanding interest rate IFC

R$ 844.9 ($156.8)            9.79 %
Inter-American Development Bank              R$ 694.6 ($128.9)            9.69 %
IDB Invest                                    $           38.0            6.35 %
IDB China Fund                                $           50.0            6.35 %


Also in April 2018, CELSE issued debentures in the aggregate principal amount of R$3,370.0 million (net proceeds of $874 million), due April 2032, bearing interest at a fixed rate of 9.85% (the "CELSE Debentures"). As of December 31, 2020, the balance of the CELSE Debentures was R$2,571.0 million ($477.3 million). Interest is payable on the CELSE Debentures semi-annually on each April 15 and October 15, beginning on October 15, 2018. The CELSE Debentures are amortized and repaid in 24 consecutive semi-annual installments on each of April 15 and October 15, commencing on October 15, 2020.

The indenture governing the CELSE Debentures contains covenants that: (i) requires CELSE to maintain a historical debt service coverage ratio for a twelve month period on or after March 31, 2021 of no less than 1.10 to 1.00; (ii) prohibit certain restricted payments; (iii) limit the ability of CELSE from creating any liens or incurring additional indebtedness; (iv) prohibit certain fundamental changes; (v) limit the ability of CELSE to transfer or purchase assets; (vi) prohibit certain affiliate transactions; (vii) limit the ability of CELSE to make change orders or give other directions under the documents related to the construction and operation of the project in certain circumstances; (viii) limit the ability of CELSE to enter into additional contracts; (ix) limit CELSE's operating expenses and capital expenditures; and (x) prohibit CELSE from transferring, purchasing or otherwise acquiring any portion of the CELSE Debentures, other than pursuant to the exercise of the put option.

On April 12, 2018, CELSEPAR-Centrais Elétricas de Sergipe Participações S.A. ("CELSEPAR") entered into a Standby Guarantee and Credit Facility Agreement with GE Capital EFS Financing, Inc. ("GE Capital"), as lender, and Ebrasil Energia Ltda. ("Ebrasil") and Golar Power Brasil Participações S.A ("Golar Brazil"), each as sponsor (the "GE Credit Facility"). Pursuant to the GE Credit Facility, GE Capital agreed to provide $120.0 million in credit support in respect of CELSEPAR's obligation to make certain contingent equity contributions to CELSE. Amounts disbursed under the GE Credit Facility accrue interest at a fixed rate of LIBOR plus a margin of 11.4% and are payable on May 30 and November 30 each year, beginning on May 30, 2021. The GE Credit Facility matures on November 30, 2024. As of December 31, 2020, there was R$689.4 million ($132.0 million) outstanding under the GE Credit Facility. The GE Credit Facility includes covenants and events of default that are customary for similar transactions.

Debenture Loan

On September 10, 2019, Hygo's subsidiary, Golar Brazil issued debentures in the aggregate principal amount of R$300.0 million ($55.7 million) due September 2024, bearing interest at a rate equal to the one-day interbank deposit futures rate in Brazil plus 2.65% (the "Debentures"). The offering resulted in net proceeds to Golar Brazil, after deducting applicable discounts and commissions and offering expenses, of R$295.0 million ($54.8 million). Interest is payable on the Debentures semi-annually on each September 13 and March 13, beginning on September 13, 2020. Principal due under the Debentures is amortized semi-annually on each September 13 and March 13, beginning September 13, 2020.



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Golar Nanook Leaseback and Credit Facility

In September 2018, Golar FSRU8 Corp., a corporation organized in the Marshall Islands, as subsidiary of Hygo, entered into a sale and leaseback transaction with Compass Shipping 23 Corporation Limited in respect of the Golar Nanook (the "Nanook Leaseback"). In September 2018, Compass Shipping 23 Corporation Limited, the owner of the Golar Nanook, entered into a twelve-year, $277 million credit facility (the "Nanook Facility"). Although we have no control over the funding arrangements of Compass Shipping 23 Corporation Limited, we expect to be the primary beneficiary of the Golar Nanook and therefore expect to consolidate the Nanook Facility in our financial results. The Nanook Facility bears interest at LIBOR plus a margin equal to 3.5% and is repayable in a balloon payment on maturity. The Nanook Facility matures in September 2030.

The Golar Nanook is part of the Sergipe Facility. The terminal's assets consist of (i) our FSRU, the Golar Nanook, which is under a 25-year bareboat charter with CELSE (the "Sergipe FSRU Charter"), (ii) specialized mooring infrastructure and (iii) a dedicated 8 kilometer pipeline which connects to the adjacent Sergipe Power Plant. The Golar Nanook is financed through a twelve year sale-leaseback transaction with the right and obligation to repurchase the vessel at the end of the lease period. The balance of the infrastructure as well as our interest in the Sergipe Power Plant is owned through our joint venture, CELSEPAR.

The Golar Nanook operates under a 25-year bareboat charter with CELSE (the "Sergipe FSRU Charter"). Pursuant to the Sergipe FSRU Charter, the Golar Nanook generates approximately $44 million per year in bareboat charter earnings, indexed to the Consumer Price Index ("CPI"), with operating expenditures passed through to CELSE.

Pursuant to the terms of the Sergipe FSRU Charter, we expect total revenues less estimated operating costs, without adjusting for inflation, of $1.1 billion over the 25-year term. The charter terminates on December 31, 2044. In addition to the charter, we expect to generate incremental revenue in the Sergipe Facility from downstream customers. The Sergipe Facility is capable of processing up to 790,000 MMBtu/d and storing up to 170,000 cubic meters of LNG. We expect the terminal to utilize approximately 230,000 MMBtu/d (30% of the terminal's maximum regasification capacity) to provide natural gas to the Sergipe Power Plant at full dispatch.

CELSE has executed multiple PPAs pursuant to which the Sergipe Power Plant will deliver power to 26 committed offtakers, including investment grade counterparties, for a period of 25 years. These PPAs provide for guaranteed annual capacity payments of R$1.6 billion at an expected contracted EBITDA margin on gross revenue of 61% (calculated as total revenues less direct operating expenditures (including typical G&A and O&M charges relating to such arrangements) assuming zero dispatch and subject to standard adjustments for inflation and taxes to be incurred). The fixed capacity payments are adjusted annually for the Extended National Consumer Price Index (the "IPCA"), the Brazilian inflation-targeting system, which has historically offset changes in the exchange rate between the U.S. dollar and the Brazilian real. Annual revenues less operating costs are expected to be R$1.1 billion. Based on the terms of our PPAs, we expect total contracted revenues over the 25-year term, without adjusting for inflation, of R$41.0 billion. We also expect to generate incremental variable revenue during periods we elect to dispatch and sell power from the facility.

Golar Penguin Leaseback and Credit Facility

In December 2019, Golar Hull M2023 Corp., a corporation organized in the Marshall Islands, as subsidiary of Hygo, entered into a sale and leaseback transaction with Oriental LNG 02 Limited in respect of the Golar Penguin (the "Penguin Leaseback"). Payments are due quarterly in 24 installments of $1.89 million, with a balloon payment of approximately $68.0 million upon maturity. The Penguin Leaseback also contains certain covenants that, among other things, (i) require GLNG to maintain a consolidated net worth equal or greater to $450.0 million and maintain current assets equal to or greater than current liabilities and (ii) require the guarantor to maintain free liquid assets with aggregate value equal to or greater than $50.0 million. The Penguin Leaseback is cross-collateralized with a vessel under a sale and leaseback transaction between a subsidiary of GLNG and Oriental LNG 01 Limited, whereby a default under one sale and leaseback transaction automatically results in a default under the other. In connection with the Hygo Merger, a Supplemental Deed to the Penguin Leaseback was executed pursuant to which the cross-collateralization and related default were removed. The Supplemental Deed is effective subject to certain conditions, including consent from the lenders to the Penguin Facility (as defined below) set out therein.

In October 2020, Oriental LNG 02 Limited, the owner of the Golar Penguin, entered into a financing agreement to refinance its existing $113.4 million loan facility (the "Penguin Facility"). Although we have no control over the funding arrangements of Oriental LNG 02 Limited, we expect to be the primary beneficiary of the Golar Penguin and therefore expect to be required to consolidate the Penguin Facility in our financial results. The Penguin Facility bears interest at LIBOR plus a margin of 1.7% and is repayable in quarterly installments over a term of approximately six years.

Golar Celsius Leaseback and Credit Facility

On March 3, 2020, Golar Hull M2026 Corporation, a corporation organized in the Marshall Islands, as subsidiary of Hygo, entered into in a sale and leaseback transaction with Noble Celsius Shipping Limited in respect of the Golar Celsius (the "Celsius Leaseback").

In March 2020, Noble Celsius Shipping Limited, the owner of the Golar Celsius, entered into a three-year loan facility for $118.2 million (the "Celsius Facility"). The Celsius Facility is denominated in U.S. dollars and bears interest at 4.0% and is repayable at the end of the three-year period. Although we have no control over the funding arrangements of Noble Celsius Shipping Limited, we expect to be the primary beneficiary of the Golar Celsius and therefore expect to consolidate the Celsius Facility in our financial results.

GMLP Debt

Golar Eskimo Leaseback and Credit Facility

In November 2015, GMLP entered into a sale and leaseback transaction with a subsidiary, Sea 23 Leasing Co. Limited ("Eskimo SPV") of China Merchants Bank Leasing in respect of the Golar Eskimo (the "Eskimo Leaseback"). The Eskimo Leaseback also contains certain covenants that, among other things and subject to certain exceptions and qualifications require: (a) GMLP to maintain a minimum level of liquidity of $30 million and consolidated net worth of $123.95 million, (b) GMLP to not exceed a maximum net debt to EBITDA ratio of 6.5:1, (c) GMLP to maintain a minimum percentage of the value of the Golar Eskimo over the relevant outstanding balances of 110%. The Eskimo Leaseback is cross-collateralized with a vessel under a sale and leaseback transaction between a subsidiary of GLNG and Sea 24 Leasing Co. Limited, whereby a default under one sale and leaseback transaction automatically results in a default under the other.

In November 2015, Eskimo SPV, which is the legal owner of the Golar Eskimo, entered into a long-term loan facility (the "Eskimo SPV Debt"). The facility bears interest at a rate of LIBOR plus a margin. Although we have no control over the funding arrangements of the Eskimo SPV, we will be the primary beneficiary of the Golar Eskimo and therefore will be required to consolidate the Eskimo SPV Debt in our financial results.



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Table of Contents In conjunction with the closing of the GMLP Merger, GMLP delivered an irrevocable notice to terminate the Eskimo Leaseback and repurchase the Golar Eskimo, and we will complete the repurchase in the third quarter of 2021.

Golar Hilli Leaseback

Golar Hilli Corporation ("Hilli Corp") is a party to a Memorandum of Agreement, dated September 9, 2015, with Fortune Lianjiang Shipping S.A., a subsidiary of China State Shipbuilding Corporation ("Fortune"), pursuant to which Hilli Corp has sold to and leased back from Fortune the Hilli under a 10-year bareboat charter agreement (the "Hilli Leaseback"). GMLP's 50% share of Hilli Corp's indebtedness of $778.5 million amounted to $389.3 million as of December 31, 2020.

Pursuant to the GMLP Guarantee, GMLP is required to comply with the following covenants and ratios: (i) free liquid assets of at least $30 million throughout the Hilli Leaseback period; (ii) a maximum net debt to EBITDA ratio for the previous 12 months of 6.5:1; (iii) a consolidated tangible net worth of $123.95 million, and (iv) a minimum EBITDA to consolidated debt service for the previous 12 months of 1.20:1.

Series A Preferred Units

Distributions on the Preferred Units are payable out of amounts legally available therefor at a rate equal to 8.75% per annum of the stated liquidation preference. In the event of a liquidation, dissolution or winding up, whether voluntary or involuntary, holders of Preferred Units will have the right to receive a liquidation preference of $25.00 per unit plus an amount equal to all accumulated and unpaid distributions thereon to the date of payment, whether declared or not. At any time on or after October 31, 2022, the Preferred Units may be redeemed, in whole or in part, at a redemption price of $25.00 per unit plus an amount equal to all accumulated and unpaid distributions thereon on the date of redemption, whether declared or not.

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