New Fortress Energy Inc

Previous wording

Unless the context otherwise requires, references to “Company,” “NFE,” “we,” “our,” “us” or like terms refer to New Fortress Energy Inc. and its subsidiaries.

Current wording

Unless the context indicates otherwise, references to “Company,” “NFE,” “we,” “our,” “us” or like terms refer to New Fortress Energy Inc. and its subsidiaries.

Previous wording

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. Upon the completion of commissioning in 2024, we expect to begin to source a portion of our LNG from our modular floating liquefaction facilities, which we refer to as "Fast LNG" or "FLNG." The Terminals and Infrastructure segment includes all terminal operations in Jamaica, Puerto Rico, Mexico and Brazil, as well as vessels utilized in our terminal or logistics operations. We centrally manage our LNG supply and the deployment of our vessels utilized in our terminal or logistics operations. 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

Current wording

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. We expect to begin to source a portion of our LNG from our modular floating liquefaction facilities, which we refer to as "Fast LNG" or "FLNG." Our first FLNG facility began producing LNG in July 2024. Following the anticipated sale of our Miami Facility, we expect to continue sourcing LNG from third parties and for a portion of our supply to be generated by our first FLNG unit. The Terminals and Infrastructure segment includes all terminal operations in Jamaica, Puerto Rico, Mexico and Brazil, as well as vessels utilized in our terminal or logistics operations. We centrally manage our LNG supply and the deployment of our vessels utilized in our terminal or logistics operations, which allows us to optimally manage our LNG supply and fleet.

Previous wording

In March 2024, we completed a suite of transactions that included the sale of turbines and related equipment deployed to support the grid stabilization project to PREPA under an Asset Purchase Agreement ("APA"). The purchase price was $306.6 million, and the APA includes an option for PREPA to purchase three additional turbines for additional purchase price of $65.7 million. We recognized a loss of $77.5 million in Loss on sale of assets, net in the Condensed Consolidated Statements of Operations and Comprehensive Income.

Current wording

In March 2024, we completed a series of transactions that included the sale of turbines and related equipment deployed to support the grid stabilization project to PREPA under an Asset Purchase Agreement ("APA"). The purchase price was $306.6 million, and the APA includes an option for PREPA to purchase three additional turbines for additional purchase price of $65.7 million. We recognized a loss of $77.5 million in Loss on sale of assets, net in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Previous wording

In the fourth quarter of 2021, we began commercial operations at the Port of Pichilingue in Baja California Sur, Mexico (the “La Paz Facility”). The La Paz Facility also supplies our gas-fired power units located adjacent to the La

Current wording

In the fourth quarter of 2021, we began commercial operations at the Port of Pichilingue in Baja California Sur, Mexico (the “La Paz Facility”). The La Paz Facility also supplies our gas-fired power units located adjacent to the La Paz Facility (the “La Paz Power Plant”) and could have a maximum capacity of up to 135MW of power. We placed the La Paz Power Plant into service in the third quarter of 2023.

Previous wording

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.

Current wording

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. On June 30, 2024, the Company entered into a definitive agreement to sell its Miami Facility for $62 million. The transaction is expected to close in the third quarter of 2024 subject to customary terms and conditions.

Previous wording

NFE provides reliable, affordable and clean energy supplies to customers around the world that we plan to satisfy through the following sources: 1) our current contractual supply commitments; 2) additional LNG supply contracts expected to commence in 2027; 3) our Miami Facility; and 4) supply from our own Fast LNG production. We have secured commitments to purchase and receive physical delivery of LNG volumes for 100% of our expected committed volumes for each of our downstream terminals inclusive of our Montego Bay Facility, Old Harbour Facility, San Juan Facility, La Paz Facility, Puerto Sandino Facility, Barcarena Facility and Santa Catarina Facility. Additionally, we have binding contracts for LNG volumes from two separate U.S. LNG facilities, each with a 20-year term, which are expected to commence in 2027. Finally, we plan to commence production from our own Fast LNG facilities upon the completion of commissioning in 2024. We plan to expand that capacity when additional Fast LNG units come online.

Current wording

NFE provides reliable, affordable and clean energy supplies to customers around the world that we plan to satisfy through the following sources: 1) our current contractual supply commitments; 2) additional LNG supply contracts expected to commence in 2027; and 3) supply from our own Fast LNG production. We have secured commitments to purchase and receive physical delivery of LNG volumes for 100% of our expected committed volumes for each of our downstream terminals inclusive of our Montego Bay Facility, Old Harbour Facility, San Juan Facility, La Paz Facility, Puerto Sandino Facility, Barcarena Facility and Santa Catarina Facility. Additionally, we have binding contracts for LNG volumes from two separate U.S. LNG facilities, each with a 20-year term, which are expected to commence in 2027. Finally, we plan to commence production from our own Fast LNG facilities, the first of which began to produce LNG in July 2024. We plan to expand that capacity when additional Fast LNG units come online.

Previous wording

exposure to fluctuations in natural gas prices as our pricing in contracts with customers is largely based on the Henry Hub index price plus a fixed fee component. Additionally, with our own Fast LNG production, we plan to further mitigate our exposure to variability in LNG prices. In 2022 and 2023, our revenue and results of operations have benefited from selling cargos into the global LNG market. As FLNG facilities commence production, our long-term strategy is to sell substantially all cargos produced to customers on a long-term, take-or-pay basis through our downstream terminals.

Current wording

Natural gas and LNG markets have experienced unprecedented price volatility in recent years. The majority of our LNG supply contracts are based on a natural gas-based index, Henry Hub, plus a contractual spread. We limit our exposure to fluctuations in natural gas prices as our pricing in contracts with customers is largely based on the Henry Hub index price plus a fixed fee component. Additionally, with our own Fast LNG production, we plan to further mitigate our exposure to variability in LNG prices. In 2022 and 2023, our revenue and results of operations benefited from selling cargos into the global LNG market. As FLNG facilities commence production, our long-term strategy is to sell substantially all cargos produced to customers on a long-term, take-or-pay basis through our downstream terminals.

Previous wording

In August 2022, we completed a transaction(the “Energos Formation Transaction”)with an affiliate of Apollo Global Management, Inc., pursuant to which we transferred ownership of 11 vessels to Energos in exchange for approximately$1.85 billion in cash and a 20% equity interest in Energos. Ten of the vessels were subject to current or future charters with NFE and one vessel (the Nanook) was not subject to a future NFE charter. The in-place and future charters to NFE of ten vessels prevent the recognition of the sale of those vessels to Energos, and the proceeds associated with these vessels have been treated as a failed sale leaseback. As a result, these ten vessels continue to be recognized on our consolidated balance sheet as Property, plant and equipment, and the proceeds are recognized as debt. Consistent with this treatment as a failed sale leaseback, (i) the third party charter revenues continue to be recognized by us as Vessel charter revenue; (ii) the costs of operating the vessels is included in Vessel operating expenses for the remaining terms of the third-party charters and (iii)

Current wording

In August 2022, we completed a transaction(the “Energos Formation Transaction”)with an affiliate of Apollo Global Management, Inc., pursuant to which we transferred ownership of eleven vessels to Energos in exchange for approximately$1.85 billion in cash and a 20% equity interest in Energos. Ten of the vessels were subject to current or future charters with NFE and one vessel (the Nanook) was not subject to a future NFE charter. The in-place and future charters to NFE of ten vessels prevent the recognition of the sale of those vessels to Energos, and the proceeds associated with these vessels have been treated as a failed sale leaseback. As a result, these ten vessels continue to be recognized on our Consolidated Balance Sheet as Property, plant and equipment, and the proceeds are recognized as debt. Consistent with this treatment as a failed sale leaseback, (i) the third party charter revenues continue to be recognized by us as Vessel charter revenue; (ii) the costs of operating the vessels is included in Vessel operating expenses for the remaining terms of the third-party charters and (iii) such revenues are included as part of debt service for the sale leaseback financing debt and are included in additional financing costs within Interest expense, net. In February 2024, we sold substantially all of our stake in Energos.

Previous wording

Our projects currently under development include our development of a series of modular liquefaction facilities to provide a source of low-cost supply of LNG to customers around the world through our Fast LNG technologies; our LNG terminal facility and power plant in Puerto Sandino, Nicaragua (“Puerto Sandino Facility”); our LNG terminal (“Barcarena Facility”) and power plant (“Barcarena Power Plant”) located in Pará, Brazil; our LNG terminal located on the southern coast of Brazil ("Santa Catarina Terminal"); our LNG terminal (“Ireland Facility”) and power plant in Ireland, and our first green hydrogen project ("ZeroPark I"). We are also in active discussions to develop projects in multiple regions around the world that may have significant demand for additional power, LNG and natural gas, although there can be no assurance that these discussions will result in additional contracts or that we will be able to achieve our target revenue or results of operations.

Current wording

Our projects currently under development include our development of a series of modular liquefaction facilities to provide a source of low-cost supply of LNG to customers around the world through our Fast LNG technologies; our LNG terminal facility and power plant in Puerto Sandino, Nicaragua (“Puerto Sandino Facility”); our LNG terminal (“Barcarena Facility”) and power plants (“Barcarena Power Plant” and "PortoCem Power Plant") located in Pará, Brazil; our LNG terminal located on the southern coast of Brazil ("Santa Catarina Terminal"); our LNG terminal (“Ireland Facility”) and power plant in Ireland, our first green hydrogen project ("ZeroPark I") and Klondike Digital Infrastructure, our newly-launched power and data center infrastructure business ("Klondike"). We are also in active discussions to develop projects in multiple regions around the world that may have significant demand for additional power, LNG and natural gas, although there can be no assurance that these discussions will result in additional contracts or that we will be able to achieve our target revenue or results of operations.

Previous wording

In the first quarter of 2023, we executed an agreement with CFE to supply natural gas for one FLNG unit located off the coast of Altamira, Tamaulipas, Mexico. The 1.4 million ton per annum (“MTPA”) FLNG unit will utilize CFE’s firm pipeline transportation capacity on the Sur de Texas-Tuxpan Pipeline to receive feedgas volumes. Our first FLNG unit has been installed and connected to the gas pipeline at Altamira, and we are in the process of commissioning the project.

Current wording

In the first quarter of 2023, we executed an agreement with CFE to supply natural gas for one FLNG unit located off the coast of Altamira, Tamaulipas, Mexico. The 1.4 million ton per annum (“MTPA”) FLNG unit will utilize CFE’s firm pipeline transportation capacity on the Sur de Texas-Tuxpan Pipeline to receive feedgas volumes. Our first FLNG unit has been installed and connected to the gas pipeline at Altamira, and we are in the process of commissioning the project. While we experienced a delays in commissioning our first FLNG unit, which impacted our results of operations in this period and may impact our results in future periods, in July 2024, we began to produce LNG, and we expect to achieve run-rate production later in 2024.

Previous wording

We are developing an offshore liquefied natural gas receiving and storage facility off the coast of Puerto Sandino, Nicaragua, as well as an onshore regasification facility. We have entered into a 25-year PPA with Nicaragua’s electricity distribution companies, and we expect to utilize approximately 57,000 MMBtu from LNG per day to provide natural gas to the Puerto Sandino Power Plant in connection with the 25-year power purchase agreement. As part of our long-term partnership with the local utility, we are evaluating solutions to optimize power generation efficiency and allow for additional electrical capacity in a market that is underserved. We expect to complete this optimization in 2024.

Current wording

We are developing a liquefied natural gas receiving, transloading and regasification facility in Puerto Sandino, Nicaragua, as well as a pipeline connecting the facility with our Puerto Sandino Power Plant. We have entered into a 25-year PPA with Nicaragua’s electricity distribution companies, and we expect to utilize approximately 57,000 MMBtu from LNG per day to provide natural gas to the Puerto Sandino Power Plant in connection with the 25-year power purchase agreement. As part of our long-term strategy, we are evaluating solutions to optimize power generation and delivery to other markets, connected to our power plant through a regional transmission line starting in 2025.

Previous wording

The Barcarena Facility consists of an FSRU and associated infrastructure, including mooring and offshore and onshore pipelines. The Barcarena Facility is capable of processing over one million MMBtu from LNG per day and storing up to 160,000 cubic meters of LNG. We have entered into a 15-year gas supply agreement with a subsidiary of Norsk Hydro ASA for the supply of natural gas to the Alunorte Alumina Refinery in Pará, Brazil, through our Barcarena Facility. We substantially completed our Barcarena Facility in 2022 and expect to commence operations, including delivery to the Alunorte Alumina Refinery in the first half of 2024.

Current wording

The Barcarena Facility consists of an FSRU and associated infrastructure, including mooring and offshore and onshore pipelines. The Barcarena Facility is capable of processing over one million MMBtu from LNG per day and storing up to 160,000 cubic meters of LNG. We have entered into a 15-year gas supply agreement with a subsidiary of Norsk Hydro ASA for the supply of natural gas to the Alunorte Alumina Refinery in Pará, Brazil, through our Barcarena Facility. We substantially completed our Barcarena Facility in 2022 and expect to commence operations, including delivery to the Alunorte Alumina Refinery in the second half of 2024.

Previous wording

In March 2024, we closed the acquisition of PortoCem Geração de Energia S.A. ("PortoCem"), a wholly-owned subsidiary of Ceiba Fundo de Investimento em Participações Multiestratégia- Investimento no Exterior ("Ceiba Energy") in exchange for newly issued 4.8% NFE redeemable Series A Convertible Preferred Stock. PortoCem isthe owner of a 15-year 1.6GW power power purchase agreement in Brazil. We have received approvalto transfer the 1.6 GW capacity reserve contract to a site owned by NFE that is adjacent to the Barcarena Facility, where NFE will build a power plant to supply the capacity reserve contract using gas from the Barcarena Facility. We expect to begin delivering electricity under the acquired capacity reserve contract in July 2026.

Current wording

In March 2024, we closed the acquisition of PortoCem Geração de Energia S.A. ("PortoCem"), a wholly-owned subsidiary of Ceiba Fundo de Investimento em Participações Multiestratégia- Investimento no Exterior ("Ceiba Energy") in exchange for newly issued 4.8% NFE redeemable Series A Convertible Preferred Stock. PortoCem isthe owner of a 15-year 1.6GW capacity reserve contract in Brazil. We have received approvalto transfer the 1.6 GW capacity reserve contract to a site owned by NFE that is adjacent to the Barcarena Facility, where NFE will build the PortoCem Power Plant to supply the capacity reserve contract using gas from the Barcarena Facility. We expect to begin delivering electricity under the acquired capacity reserve contract in July 2026.

Previous wording

The Santa Catarina Facility is located on the southern coast of Brazil and consists of an FSRU with a processing capacity of approximately 500,000 MMBtu from LNG per day and LNG storage capacity of up to 138,000 cubic meters. We are developing a 33-kilometer, 20-inch pipeline that connects the Santa Catarina Facility to the existing inland Transportadora Brasileira Gasoduto Bolivia-Brasil S.A. (“TBG”) pipeline via an interconnection point in the municipality of Garuva. The Santa Catarina Facility and associated pipeline are expected to have a total addressable market of 15 million cubic meters per day. We expect to complete our Santa Catarina Facility and commence operations in the first half of 2024.

Current wording

The Santa Catarina Facility is located on the southern coast of Brazil and consists of an FSRU with a processing capacity of approximately 500,000 MMBtu from LNG per day and LNG storage capacity of up to 138,000 cubic meters. We have developed a 33-kilometer, 20-inch pipeline that connects the Santa Catarina Facility to the existing inland Transportadora Brasileira Gasoduto Bolivia-Brasil S.A. (“TBG”) pipeline via an interconnection point in the municipality of Garuva. The Santa Catarina Facility and associated pipeline are expected to have a total addressable market of 15 million cubic meters per day. We expect to complete commissioning of our Santa Catarina Facility and commence operations in the second half of 2024.

Previous wording

Our first clean hydrogen project, known as ZeroPark I, is located in Beaumont, Texas. The ZeroPark I facility is sited within a 10-mile radius of the two largest refineries in the western hemisphere and numerous petrochemical manufacturers, many of which require significant amounts of hydrogen for their businesses. ZeroPark I, as planned, could use up to 200 MW of power, constructed in two distinct phases, each using 100 MW of electrolysis technology. In total, ZeroPark I is expected to produce up to 86,000 kg of clean hydrogen per day, or approximately 31,000 TPA. We have commenced design, engineering and permitting for ZeroPark I and expect to commence operations on the first phase in the first half of 2025. Additionally, we have secured a binding offtake commitment for the clean hydrogen produced at ZeroPark I. Once completed, we expect ZeroPark I to be the largest green hydrogen plant in the United States.

Current wording

Our first clean hydrogen project, known as ZeroPark I, is located in Beaumont, Texas. The ZeroPark I facility is sited within a 10-mile radius of the two largest refineries in the western hemisphere and numerous petrochemical manufacturers, many of which require significant amounts of hydrogen for their businesses. ZeroPark I, as planned, could use up to 200 MW of power, constructed in two distinct phases, each using 100 MW of electrolysis technology. In total, ZeroPark I is expected to produce up to 86,000 kg of clean hydrogen per day, or approximately 31,000 TPA. We have commenced design, engineering and permitting for ZeroPark I and expect to commence operations on the first phase in 2025. Additionally, we have secured a binding offtake commitment for the clean hydrogen produced at ZeroPark I. Once completed, we expect ZeroPark I to be the largest green hydrogen plant in the United States.

Previous wording

Results of Operations – Three Months Ended March 31, 2024 compared to Three Months Ended December 31, 2023 and Three Months Ended March 31, 2023

Current wording

Results of Operations – Three Months Ended June 30, 2024 compared to Three Months Ended March 31, 2024 and Six Months Ended June 30, 2024 compared to Six Months Ended June 30, 2023

Previous wording

The tables below present our segment information for the three months ended March 31, 2024, December 31, 2023 and March 31, 2023:

Current wording

The tables below present our segment information for the three months ended June 30, 2024 and March 31, 2024, and for the six months ended June 30, 2024 and June 30, 2023:

Previous wording

(1) Cost of sales in our segment measure only includes realized gains and losses on derivative transactions that are economic hedges of our commodity purchases and sales. For the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, Terminals and Infrastructure does not include unrealized mark-to-market gains (losses) of derivative transactions of $–, 1.5 million and $111.1 million, respectively. In the first quarter of 2023, a realized gain of $146.1 million were recognized as a reduction to Cost of sales in the segment measure.

Current wording

(1) Cost of sales in our segment measure only includes realized gains and losses on derivative transactions that are economic hedges of our commodity purchases and sales, and realized gains of $141.9 million for the six months ended June 30, 2023 were recognized as a reduction to Cost of sales in the segment measure. No such transactions were completed in 2024.

Previous wording

(2) Cost of sales is presented exclusive of costs included in Depreciation and amortization in the Condensed Consolidated Statements of Operations and Comprehensive Income.

Current wording

(2) Cost of sales is presented exclusive of costs included in Depreciation and amortization in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Previous wording

(3) Consolidation and Other adjusts for the inclusion of the effective share of revenues, expenses and operating margin attributable to the Company's ownership of the common units of Hilli LLC in the segment measure, prior to the disposition to this investments, and exclusion of the unrealized mark-to-market gain or loss on derivative instruments.

Current wording

(3) Consolidation and Other adjusts for the inclusion of deferred earnings on contracted LNG sales of $90,000. The effective share of revenues, expenses and operating margin attributable to the Company's ownership of the common units of Hilli LLC in the segment measure, prior to the disposition to this investment, as well as unrealized mark-to-market gain or loss on derivative instruments, are also removed.

Previous wording

The decrease in revenue in the first quarter of 2024 when compared to the fourth quarter of 2023 was primarily attributable to decreases in the market price of natural gas. The average Henry Hub index pricing used to invoice our downstream customers decreased by 22% for the three months ended March 31, 2024 as compared to the three months ended December 31, 2023. Volumes delivered to downstream terminal customers decreased from 22.2 TBtus in the fourth quarter of 2023 to 22.0 TBtu in the first quarter of 2024.

Current wording

Additionally, volumes delivered to downstream terminal customers decreased from 22.0 TBtu in the first quarter of 2024 to 20.2 TBtu in the second quarter of 2024, which was primarily due to contract termination and maintenance in our Puerto Rico operations. The average Henry Hub index pricing used to invoice our downstream customers decreased by 15% for the three months ended June 30, 2024 as compared to the three months ended March 31, 2024.

Previous wording

Total revenue for the Terminals and Infrastructure Segment decreased by $47.3 million for the three months ended March 31, 2024 as compared to the three months ended December 31, 2023, and total revenue for the Terminals and Infrastructure Segment increased by $145.1 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Current wording

Total revenue for the Terminals and Infrastructure Segment increased by $35.1 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, and the increase in revenue was primarily attributable to the following:

Previous wording

•The average Henry Hub index pricing used to invoice our downstream customers decreased by 35% for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Current wording

•The average Henry Hub index pricing used to invoice our downstream customers decreased by 25% for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Previous wording

•The Company had no cargo sales for the three months ended March 31, 2024 as we were able to utilize all volumes under our supply contracts in our downstream terminal operations. Revenue from cargos sales was $349.3 million for the three months ended March 31, 2023.

Current wording

•The Company had $24.5 million in cargo sales for the six months ended June 30, 2024. Revenue from cargos sales was$617.1 million for the six months ended June 30, 2023

Previous wording

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. Starting in the third quarter of 2023, our subsidiary, Genera, began to provide operations and maintenance services to PREPA's thermal generation assets, and cost to provide these services is included in Cost of sales. Under our contract with PREPA, we pass all of these costs onto PREPA, and such billings are recognized as revenue.

Current wording

Cost of sales includes the procurement of feed gas or LNG, as well as shipping and logistics costs to deliver LNG or natural gas to our facilities. Historically, our LNG and natural gas supply has been purchased from third parties or converted in our Miami Facility. Following the anticipated sale of our Miami Facility, we expect to continue sourcing LNG from third parties and for a portion of our supply to be generated by our first FLNG unit. Costs to convert natural gas to LNG, including labor, depreciation and other direct costs to operate our liquefaction facilities are also included in Cost of sales. Starting in the third quarter of 2023, our subsidiary, Genera, began to provide operations and maintenance services to PREPA's thermal generation assets, and cost to provide these services is included in Cost of sales. Under our contract with PREPA, we pass all of these costs onto PREPA, and such billings are recognized as revenue.

Previous wording

Cost of sales increased by $155.3 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, which was attributable to the following:

Current wording

Cost of sales increased by $154.8 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, which was attributable to the following activity:

Previous wording

•Realized gain of $146.1 from the settlement of a commodity swap transaction, entered into as an economic hedge to reduce the market risks associated with commodity prices, was included as reduction of cost of sales in the first quarter of 2023. For segment performance measures, unrealized mark to market gains and losses are excluded until settled. We had no settlements of commodity derivative transactions in the first quarter of 2024.

Current wording

•In the six months ended June 30, 2023, realized gains of $141.9 million from the settlement of commodity swap transactions, entered into as an economic hedge to reduce the market risks associated with commodity prices, were included as reduction of cost of sales in the segment measure. For segment performance measures, unrealized mark to market gains and losses are excluded until settled. No such transactions occurred in the current period.

Previous wording

•In the first quarter of 2024, we did not have any cargo sales and we delivered higher volumes to our downstream terminal customers in the current period as compared to the three months ended March 31, 2023. While we delivered more volumes to our downstream customers, our pricing to purchase LNG for delivery to such customers decreased to $6.96 per MMBtu for the three months ended March 31, 2024 from $7.23 per MMBtu for the three months ended March 31, 2023.

Current wording

•We incurred increased cost of LNG purchased from third parties for sale to our downstream customers of $71.1 million during the six months ended June 30, 2024 due to increased volumes delivered. We delivered 61% more volume to our downstream terminal customers in the current period. While we delivered significantly more volumes to our downstream customers, our pricing to purchase LNG for delivery to such customers was lower, decreasing to $6.65 per MMBtu for the six months ended June 30, 2024 from $7.66 per MMBtu for the six months ended June 30, 2023.

Previous wording

•We recognized additional payroll and other operating costs of $21.0 million to provide services under Genera's operations and maintenance contract; these costs are passed onto PREPA.

Current wording

•We recognized additional payroll and other operating costs of $47.6 million to provide services under Genera's operations and maintenance contract; these costs are passed onto PREPA. No such costs were incurred during the six months ended June 30, 2023 as our contract commenced on July 1, 2023.

Previous wording

The weighted-average cost of our LNG inventory balance to be used in our operations as of March 31, 2024 and December 31, 2023 was $7.10 per MMBtu and $7.33 per MMBtu, respectively.

Current wording

The weighted-average cost of our LNG inventory balance to be used in our operations as of June 30, 2024 and December 31, 2023 was $7.30 per MMBtu and $8.09 per MMBtu, respectively.

Previous wording

Revenue in the Ships segment is comprised of operating lease revenue under time charters, fees for positioning and repositioning vessels as well as the reimbursement of certain vessel operating costs. As of December 31, 2023 and March 31, 2024, three FSRUs and one LNG carrier were leased to customers under long-term arrangements.

Current wording

Revenue in the Ships segment is comprised of operating lease revenue under time charters, fees for positioning and repositioning vessels as well as the reimbursement of certain vessel operating costs. As of June 30, 2024, three FSRUs and one LNG carrier were leased to customers under long-term arrangements.

Previous wording

On March 15, 2023, we completed disposition of our investment in the common units of Hilli LLC, and after this point, the revenue, expenses and operating margin attributable to our 50% ownership of the Hilli are no longer included in our segment results. In the first quarter of 2024, we sold the vessel Mazo, for a total consideration of $22.4 million resulting in a gain of $0.4 million. The gain on sale is included in Loss on sale of assets, net, in the Condensed Consolidated Statements of Operations and Comprehensive Income.

Current wording

On March 15, 2023, we completed disposition of our investment in the common units of Hilli LLC, and after this point, the revenue, expenses and operating margin attributable to our 50% ownership of the Hilli are no longer included in our segment results. In the first quarter of 2024, we sold the vessel Mazo, for a total consideration of $22.4 million resulting in a gain of $0.4 million. The gain on sale is included in Loss on sale of assets, net, in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Previous wording

Total revenue for the Ships segment decreased $20.7 million for the three months ended March 31, 2024 as compared to the three months ended December 31, 2023. Subsequent to the Energos Formation Transaction, we continue to be, for accounting purposes, the owner of certain vessels included in the transaction, and as such, we continue to recognize revenue from the charter of these vessels to third parties. The decrease in revenue was primarily driven by end of third-party charters of Winter and Princess during the fourth quarter of 2023.

Current wording

Total revenue for the Ships segment remained consistent for the three months ended June 30, 2024 as compared to thethree months ended March 31, 2024. Subsequent to the Energos Formation Transaction, we continue to be, for accounting purposes, the owner of certain vessels included in the transaction, and as such, we continue to recognize revenue from the charter of these vessels to third parties.

Previous wording

Total revenue for the Ships segment decreased $55.3 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. After the disposition of our investment in the common units of Hilli LLC at the end of the first quarter of 2023, we no longer recognize revenue from the Hilli, decreasing revenue in the Ships segment. Additionally the charters for four vessels concluded in 2023, lowering vessel revenue for thethree months ended March 31, 2024. We are now utilizing these vessels in our operations.

Current wording

Total revenue for the Ships segment decreased $78.6 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. After the disposition of our investment in the common units of Hilli LLC at the end of the first quarter of 2023, we no longer recognize revenue from the Hilli, decreasing revenue in the Ships segment. Additionally the charters for four vessels concluded in 2023, lowering vessel revenue for the six months ended June 30, 2024. We are now utilizing these vessels in our operations.

Previous wording

Vessel operating expenses decreased $10.8 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The decrease in vessel operating expenses was primarily due to lower costs related to the Hilli after the disposition our investment in the common units of Hilli LLC at the end of the first quarter of 2023. During 2024, we started using four vessels that were in the Ships segment in 2023 in our terminal operations, resulting in lower vessel operating costs.

Current wording

Vessel operating expenses decreased$13.8 million for thesix months ended June 30, 2024 as compared to thesix months ended June 30, 2023. The decrease in vessel operating expenses was primarily due to lower costs related to the Hilli after the disposition our investment in the common units of Hilli LLC at the end of the first quarter of 2023. During 2024, we started using four vessels that were in the Ships segment in 2023 in our terminal operations, resulting in lower vessel operating costs.

Previous wording

The Company did not incur significant transaction and integration costs for the three months ended March 31, 2024, December 31, 2023 and March 31, 2023.

Current wording

We did not incur significant transaction and integration costs for the three or six months ended June 30, 2024 or six months ended June 30, 2023.

Previous wording

Depreciation and amortization increased by $16.1 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase is primarily resulting from turbines placed into service as part of the grid stabilization project during the second and third quarters of 2023. In addition, the Company placed the La Paz power plant into service in September 2023.

Current wording

Depreciation and amortization increased $11.4 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. In 2023, we began to place assets in service as part of the grid stabilization project in Puerto Rico, including turbines leased for the Palo Seco Power Plant under a finance lease. The increase is primarily resulting from depreciation of the leasehold improvements that were placed into service during the second and third quarters of 2023, prior to the sale of these assets in the first quarter of 2024.

Previous wording

In December 2023, the Company recognized an impairment of $11.0 million in conjunction with the classification as held for sale of its vessel Mazo. There was no impairment of assets during three months ended March 31, 2024 or March 31, 2023.

Current wording

In December 2023, the Company recognized an impairment of$4.3 million in conjunction with the classification as the Miami Facility as held for sale in the second quarter of 2024. There was no impairment of assets during three months ended March 31, 2024 or six months ended June 30, 2023.

Previous wording

During the three months ended March 31, 2024, the Company recognized a loss of $77.5 million from the sale of turbines and related equipment to the PREPA. During the fourth quarter of 2023, we completed the sale of 100% of shares in two project companies in Brazil for a total gain of $21.5 million.

Current wording

During the three months ended March 31, 2024, the Company recognized a loss of $77.5 million from the sale of turbines and related equipment to the PREPA. We did not have any losses on sales during the three months ended June 30, 2024 or six months ended June 30, 2023.

Previous wording

Interest expense increased by $0.4 million for the three months ended March 31, 2024 as compared to the three months ended December 31, 2023. The increase was primarily due to new 2029 Notes (defined below).

Current wording

Interest expense increased by $3.1 million for the three months ended June 30, 2024 as compared to the three months ended March 31, 2024. We have incremental borrowings under the PortoCem Bridge Loan and our new Turbine Financing (each as defined below), and much of this increased interest expense was capitalized.