New Fortress Energy Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
NFE$4.49+16.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001749723-24-000072
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001749723-24-000116
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 207 previous paragraphs and 256 current paragraphs.
122 unchanged; 71 reworded; 58 added; 14 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (58)
Current report
Klondike
Current report
Equity Offering
Current report
On October 1, 2024, the Company entered into an Underwriting Agreement with several underwriters to issue and sell 46,349,942 shares of our Class A common stock, par value $0.01 per share, at a purchase price to the public of $8.63 per share, less underwriting discounts and commissions, in a registered public offering (the "Equity Offering"). Our chief executive officer, Wesley R. Edens, agreed to purchase 5,793,742 shares at the public offering price per share and on the same terms as the other purchasers in the Equity Offering. The Equity Offering closed on October 2, 2024. We received net proceeds of approximately $387.3 million after underwriters' discounts and commissions and the estimated offering expenses payable by the Company.
Current report
Transaction Support Agreement and Exchange and Subscription Agreement
Current report
On September 30, 2024, we entered into a Transaction Support Agreement (the "TSA") with certain holders of our 2025 Notes, 2026 Notes, and 2029 Notes. The TSA relates to a series of transactions, among the Company, certain of the Company's direct and indirect subsidiaries and certain holders of the 2025 Notes, 2026 Notes and 2029 Notes ( the "Supporting Holders"), intended to extend the maturity profile of our indebtedness while providing additional operating liquidity and financial flexibility.
Current report
On November 6, 2024, we entered into a privately negotiated exchange and subscription agreement (the "Exchange and Subscription Agreement") with the Supporting Holders to implement the transactions described in the TSA. Pursuant to the Exchange and Subscription Agreement, (i) NFE Financing LLC ("NFE Financing"), an indirectly owned subsidiary of the Company, will sell to the Supporting Holders approximately $1.2 billion aggregate principal amount of 12.00% Senior Secured Notes due 2029 (the "New Notes") (the transactions described in clause (i), the "Subscription Transactions") and (ii) NFE Financing will issue to the Supporting Holders $1.5 billion aggregate principal amount of New Notes in a dollar-for-dollar exchange for our 2026 Notes and 2029 Notes (the "Exchange Transactions" and together with the Subscription Transactions, the "Transactions"). The New Notes will be issued pursuant to an indenture (the "New Notes Indenture") and will be issued in private placements in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. We intend to use net proceeds from the Transactions to repay in full the outstanding aggregate principal amount of our 2025 Notes and for general corporate purposes.
Current report
Pursuant to the Exchange and Subscription Agreement, the Supporting Holders may elect to receive a commitment fee equal to either (i) 5% of the aggregate principal amount of such Supporting Holder’s New Notes, payable in shares of our Class A common stock, at a price of $8.63 per share (the "Commitment Fee Shares"), (ii) 2% of the aggregate principal amount of such Supporting Holder’s New Notes, payable in kind in the form of additional New Notes (the "Commitment Fee Notes"), or (iii) a combination of the foregoing. To the extent any Supporting Holder elects to receive Commitment Fee Notes, the equivalent value in Commitment Fee Shares will be ratably reallocated amongst the other Supporting Holders to ensure that the Supporting Holders will in any case receive 5% of the total amount of New Notes payable in Commitment Fee Shares. In the event any Supporting Holder elects to receive the Commitment Fee Shares, such Supporting Holder will enter into a Registration Rights Agreement with the Company, pursuant to which such Supporting Holder is entitled to certain registration rights and subject to certain lock-up restrictions. Any Supporting Holders may not, subject to customary exceptions, offer, sell, contract to sell, pledge or otherwise dispose of the Commitment Fee Shares for a period of six months from the date of the Registration Rights Agreement without our prior written consent.
Current report
New Notes Indenture
Current report
Interest on the New Notes will be payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2025. The New Notes will mature on November 15, 2029 and are payable in full on maturity date. NFE Financing may redeem the New Notes, in whole or in part, at any time prior to maturity, subject to certain prepayment premiums. NFE Financing is required to prepay the New Notes, subject to repurchase premiums, upon occurrence of change of control events and other specified prepayment events. Additionally, the New Notes will be subject to a par repurchase offer in connection with any “Pass Through Prepayment Event” (defined as any prepayment made under the Brazil Parent Credit Agreement or the Series II Credit Agreement (each, as defined below)).
Current report
The New Notes will be guaranteed on a senior secured basis by NFE Financing’s wholly-owned subsidiary, Bradford County Real Estate Partners LLC ("New Notes Guarantor"), which owns our land in Wyalusing, Pennsylvania. The New Notes will be secured by first-priority liens on (a) all assets of NFE Financing, including the promissory note evidencing indebtedness under the Series II Credit Agreement, the promissory note evidencing indebtedness under the Brazil Parent Credit Agreement, approximately 45% of the equity in NFE Brazil Holdings Limited ("NFE Brazil Holdings"), which owns our Brazil business, and 100% of the equity in the New Notes Guarantor and (b) all assets of the New Notes Guarantor.
Current report
In connection with NFE Financing’s issuance of the New Notes, NFE will: (i) enter into approximately $1.4 billion Series II Credit Agreement (as defined below) with NFE Financing, (ii) enter into an approximately $970 million Series I Credit Agreement (as defined below) with NFE Brazil Investments LLC (“Brazil Parent”), an indirectly owned, restricted subsidiary of the Company and the direct parent of NFE Financing, and (iii) further cause Brazil Parent to enter into an approximately $970 million Brazil Parent Credit Agreement (as defined below) with NFE Financing.
Current report
Intercompany loans
Current report
Brazil Parent Credit Agreement
Current report
NFE Financing and Brazil Parent will enter into a credit agreement (the “Brazil Parent Credit Agreement”), whereby NFE Financing will provide a term loan of approximately $970 million (the “Brazil Parent Term Loan”) to Brazil Parent, which will mature in November 2029. The obligations under the Brazil Parent Credit Agreement will be secured by substantially all assets of Brazil Parent (including a pledge of the equity interests held by Brazil Parent in NFE Brazil Holdings). Brazil Parent may redeem the Brazil Parent Term Loan, in whole or in part, at any time prior to maturity, subject to certain make-whole premiums. Brazil Parent is required to prepay the Brazil Parent Term Loan, subject to repurchase premiums, upon occurrence of certain events, including any change of control and receipt of net proceeds from any prepayment under the Series I Credit Agreement (as defined below).
Current report
The Brazil Parent Credit Agreement is expected to contain usual and customary representations and warranties, covenants and events of default for financings of this type.
Current report
Series I Credit Agreement
Current report
NFE and Brazil Parent will enter into a term loan credit agreement (“Series I Credit Agreement”), under which Brazil Parent will provide NFE a senior secured term loan in an aggregate principal amount of approximately $970 million (the “Series I Term Loan”).
Current report
We intend to use proceeds to repay in full the outstanding aggregate principal amount of our 2025 Notes and consummate a portion of the Exchange Transactions.
Current report
Series II Credit Agreement
Current report
NFE and NFE Financing will enter into a term loan credit agreement (“Series II Credit Agreement”), under which NFE Financing will provide NFE a senior secured term loan in an aggregate principal amount of approximately $1.4 billion (the “Series II Term Loan”). The proceeds will be used to consummate the Exchange Transactions.
Current report
Both Series I and Series II Term Loan will mature in November 2029 and will be payable in full on the maturity date. The obligations under both the Series I Credit Agreement and Series II Credit Agreement will be guaranteed, jointly and severally, on a senior secured basis by each subsidiary that is a guarantor under the 2026 Notes and the 2029 Notes. The obligations under the Series I and Series II Credit Agreement will be secured by substantially the same collateral that currently secures the 2026 Notes and 2029 Notes. An equal priority intercreditor agreement will govern the treatment of the collateral.
Current report
We may redeem the Series I and Series II Term Loan, in whole or in part, at any time prior to maturity, subject to certain make-whole premiums. In addition, we will be required to prepay the Series I and Series II Term Loan upon the occurrence of any change of control (as defined in the New Notes Indenture and the Brazil Parent Credit Agreement), and with the net proceeds of certain asset sales, condemnations and debt and convertible securities issuances.
Current report
Both Series I and Series II Credit Agreement are expected to contain customary representations, warranties, covenants and events of default, subject to certain thresholds and grace periods, typical for financings of this type.
Current report
Credit Agreement Amendments
Current report
On November 6, 2024, we entered into the Ninth Amendment to our Revolving Credit Agreement (the “Ninth Amendment”), which extends the maturity date of the Revolving Facility for consenting lenders from April 15, 2026 to October 15, 2027, subject to certain events that would cause the maturity to spring to an earlier date as described in the Ninth Amendment.
Current report
On November 6, 2024, we entered into the Fifth Amendment to Uncommitted Letter of Credit and Reimbursement Agreement (the “Fifth Amendment”, and together with the “Ninth Amendment,” the “Amendments”). The Amendments, among other things, modify the definition of Excluded Assets and exclude certain assets of our Brazil business from the definition of Excluded Assets. The Amended Credit Agreements also amend the financial covenant that tests the consolidated first lien debt ratio. The consolidated first lien debt ratio cannot exceed (i) 9.50 to 1.00, for the fiscal quarters ending March 31, 2025 through June 30, 2025, (ii) 8.50 to 1.00, for the fiscal quarters ending September 30, 2025 through December 31, 2025, (iii) 8.00 to 1.00, for the fiscal quarters ending March 31, 2026 through June 30, 2026, and (iv) 7.50 to
Current report
1.00, for the fiscal quarters ending September 30, 2026 and each fiscal quarter thereafter. The Amended Credit Agreements also add a fixed charge coverage ratio test. Commencing with the fiscal quarter ending March 31, 2025, we cannot permit the fixed charge coverage ratio (the ratio of consolidated EBITDA to fixed charges) for the Company and its restricted subsidiaries to be less than 0.80 to 1.00 for the fiscal quarter ending March 31, 2025 and, for the fiscal quarter ending June 30, 2025 and each fiscal quarter thereafter, 1.00 to 1.00. Additionally, the Amendments modify how consolidated EBITDA is calculated to more closely align with the calculations in certain of our existing term loan facilities and also remove the Debt to Total Capitalization Ratio.
Current report
Lumina Note Purchase Agreement
Current report
On November 6, 2024, NFE Brazil Financing Limited (“NFE Brazil”), a wholly-owned, indirect subsidiary of the Company, entered into a note purchase agreement (the “Note Purchase Agreement”) to issue and sell up to $350 million aggregate principal amount of its 15% Senior Secured Notes due 2029 (the “NFE Brazil Notes”) at a purchase price of 97.75% of the principal amount. The obligations under the NFE Brazil Notes will be guaranteed by the Company and certain subsidiaries of NFE Brazil, and NFE Brazil, its subsidiary guarantors and certain of its other subsidiaries will grant security interests in certain of their assets to secure the NFE Brazil Notes.
Current report
On September 26, 2024, the United States Coast Guard ("USCG") filed a Letter of Recommendation with FERC in which it assessed our Letter of Intent dated April 12, 2024, and our Waterway Suitability Assessment, dated August 26, 2024, in respect of future ship to ship transfers with alternative vessels, and recommended against the allowance of the proposed operations. Further, the USCG issued a Letter of Warning in respect of our ongoing ship to ship transfers of LNG operations within the San Juan port limits. On October 21, 2024, we filed an appeal with the USCG under 33 CFR 160.7 and are awaiting a response.
Current report
On October 25, 2024, FERC issued a notice of intent to prepare an Environmental Impact Statement, which included, among other things, two public scoping sessions in Puerto Rico scheduled for November 18, 2024 in accordance with the National Environmental Policy Act.
Current report
(3) Consolidation and Other adjusts for the inclusion of deferred earnings from contracted sales of $150.0 million; a portion of these deferred earnings of $42.3 million were recognized upon delivery during the third quarter of 2024.
Current report
Total revenue for the Terminals and Infrastructure Segment increased by $96.8 million for the three months ended September 30, 2024 as compared to the three months ended June 30, 2024. The increase was primarily driven by higher cargo sales and Henry Hub index that forms a portion of the pricing to invoice most of our customers in this segment, partially offset by lower incentive fee revenue from the Genera's operation and maintenance contract.
Current report
The increase in revenue in the third quarter of 2024 when compared to the second quarter of 2024 was primarily attributable to the following:
Current report
•Revenue from cargo sales was $174.6 million for the three months ended September 30, 2024, increasing from $24.5 million for the three months ended June 30, 2024.
Current report
•In 2023, we began to support the grid stabilization project in Puerto Rico, commissioning power generation assets in the second and third quarters of 2023, and the increase in volumes for the nine months ended September 30, 2024 is primarily attributable to additional sales in Puerto. Our customer terminated the grid stabilization project in the first quarter of 2024, but we continue to sell volumes into these power plants under a new island-wide gas sale agreement signed with PREPA.
Current report
We incurred increased cost of LNG for LNG cargo sales during the third quarter of 2024 by $76.7 million compared to the second quarter of 2024 due to higher volumes delivered.
Current report
•Vessel costs increased by $59.8 million, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The increase is primarily driven by additional vessels being used for servicing our terminals during 2024.
Current report
Operations and maintenance decreased by $7.2 million for the three months ended September 30, 2024 as compared to the three months ended June 30, 2024. The decrease was primarily due to lower maintenance costs at our terminals during the third quarter and termination of the lease of three turbines during the second quarter of 2024.
Current report
Operations and maintenance increased $18.7 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. We incurred additional operations and maintenance costs at our La Paz Power Plant during nine months ended September 30, 2024 as it was placed into service in September 2023. Additional operations and maintenance cost were also incurred at our La Paz Facility in 2024 to meet higher customer demand.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Removed paragraphs (14)
Previous report
Total revenue for the Terminals and Infrastructure Segment decreased by $262.3 million for the three months ended June 30, 2024 as compared to the three months ended March 31, 2024. The decrease was primarily driven by decreases to revenue earned in our Puerto Rican operations after the termination of our contract to support the grid stabilization project late in the first quarter of 2024.
Previous report
•In the third quarter of 2023, we started providing operations and maintenance services to PREPA's thermal generation assets recognizing $109.6 million of revenue during the six months ended June 30, 2024.
Previous report
•Vessel costs increased by $47.3 million, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. In 2023, we chartered additional vessels to enable us to rapidly have the infrastructure available to deliver additional LNG to Puerto Rico to support the grid stabilization contract. In future periods, we expect our vessel costs to decrease as we optimize our supply chain to Puerto Rico with fewer and less costly vessels. We were also able to sub-charter certain vessels for a portion of the current period, earning incremental charter revenue.
Previous report
Operations and maintenance decreased $29.3 million for the three months ended June 30, 2024 as compared to the three months ended March 31, 2024. The decrease was primarily attributable to reduced operations, maintenance and lease costs of turbines to generate power as part of the grid stabilization project in Puerto Rico. In conjunction with the sale of certain turbines to PREPA, we have terminated our leases of certain turbines and are no longer incurring costs to operate these turbines.
Previous report
Operations and maintenance increased $47.5 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The increase was primarily due to additional operations and maintenance cost including lease of turbines as part of the grid stabilization project in Puerto Rico. The project operated for two and a half months during the first half of 2024, while it was just ramping up during the second quarter of 2023.
Previous report
Selling, general and administrative remained consistent for the three months ended June 30, 2024, compared to the three months ended March 31, 2024. The Company incurred increased share-based compensation expense, that were partially offset by decrease in bad debt expense. We recognized an additional $14.7 million of share-based compensation expense for RSUs and other equity awards during the second quarter of 2024 as we recognized a full quarter of expense for RSUs granted during the first quarter of 2024. During the first quarter of 2024, the Company recorded an additional allowance for uncollectible receivables of$11.6 million. There was no such allowance recognized during the second quarter of 2024. We also incurred lower payroll and professional fees in the second quarter of 2024.
Previous report
Depreciation and amortization decreased $13.1 million for the three months ended June 30, 2024 as compared to the three months ended March 31, 2024. We sold certain turbines and equipment to PREPA in the first quarter of 2024, and the decrease in depreciation was primarily a result of no longer owning these assets.
Previous report
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 report
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.
Previous report
Other expense (income), net
Previous report
Other expense (income), net was $47.4 million and $19.1 million for the three months ended June 30, 2024, and March 31, 2024, respectively. Other expense (income), net was $66.5 million and $18.4 million for the six months ended June 30, 2024 and 2023, respectively.
Previous report
We believe we will have sufficient liquidity from proceeds from recent borrowings, access to additional capital sources and cash flow from operations to fund our capital expenditures and working capital needs for the next 12 months and the reasonably foreseeable future. Our 2025 Notes mature on September 15, 2025. If any of the 2025 Notes remain outstanding 60 days prior to this maturity date (the "Springing Maturity Date"), the outstanding principal under the Revolving Facility, Term Loan B and FLNG2 Term Loans (as defined within Note 26 to the financial statements) will become immediately due. The aggregate principal amount of 2025 Notes outstanding as of June 30, 2024 is $875,000. We have entered into a Backstop Agreement with a lender, pursuant to which we may, at our sole option, issue and sell to this lender (subject to the satisfaction of certain conditions) senior secured notes up to an aggregate principal amount sufficient to generate gross proceeds of $875 million with a term of at least three years from the closing date within a certain window prior to the Springing Maturity Date. Proceeds received would be used to repurchase or redeem all outstanding 2025 Notes.
Previous report
In addition, we are exploring capital raising and strategic alternatives for our business in Brazil, which may include a merger transaction, sale of a minority interest and/ or initial public offering. There can be no assurance that the exploration of capital raising and strategic alternatives will result in any agreements or transactions, or that, if completed, any agreements or transactions will be successful or on attractive terms.
Previous report
Our cash flow provided by financing activities was $735.7 million for the six months ended June 30, 2024, which increased by $513.1 million from cash provided by financing activities of $222.6 million for the six months ended June 30, 2023. In the first quarter of 2024 we issued $750.0 million of 2029 Notes with such borrowings primarily used to repay $375.0 million of the 2025 Notes and repay a portion of our outstanding balance on the Revolving Facility. In advance of the sale of turbines to PREPA, we also repaid the Equipment Notes in full. Subsequently, we utilized our Revolving Facility to fund continued development of the Fast LNG project. We also received $284.4 million under the BNDES Credit Agreement, with such borrowings primarily used to repay the Barcarena Term Loan and fund development of the Barcarena Power Plant. In the second quarter of 2024, we borrowed $269.9 million to repay the PortoCem BTG Loan andbegin the development and construction of a power plant to deliver under the capacity reserve contracts acquired in the PortoCem Acquisition. Additionally, we borrowed $148.5 million under a promissory note secured by certain turbines owned by the Company.
Reworded paragraphs (71)
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. 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.
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. The first full cargo was loaded onto the Energos Princess vessel and set sail for Europe on September 30, 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
Our management team has successfully employed our strategy to secure long-term contracts with significant customers, 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, the
Current wording
Our management team has successfully employed our strategy to secure long-term contracts with significant customers, including Jamaica Public Service Company Limited (“JPS”), the sole public utility in Jamaica, South Jamaica
Previous wording
Puerto Rico Electric Power Authority (“PREPA”), and Comisión Federal de Electricidad (“CFE”), Mexico’s power utility, 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.
Current wording
Power Company Limited (“SJPC”), an affiliate of JPS, Jamalco, a bauxite mining and alumina producer in Jamaica, the Puerto Rico Electric Power Authority (“PREPA”), and Comisión Federal de Electricidad (“CFE”), Mexico’s power utility, 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.
Previous wording
In the fourth quarter of 2022, we finalized short-form agreements with CFE to expand and extend our supply of natural gas to multiple CFE power generation facilities in Baja California Sur and to sell the La Paz Power Plant to CFE. We executed the final long-form gas sales agreement in the second quarter of 2023, which is subject to certain conditions precedent including the execution of the final agreement to sell the La Paz Power Plant.
Current wording
In the fourth quarter of 2022, we finalized short-form agreements with CFE to expand and extend our supply of natural gas to multiple CFE power generation facilities in Baja California Sur and to sell the La Paz Power Plant to CFE. In the third quarter of 2024, we executed a 10-year gas sales agreement to supply natural gas to additional CFE facilities on take-or-pay basis.
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. 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.
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 fourth 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; 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.
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 source production from our own Fast LNG facilities, the first of which began to produce LNG in July 2024. We sold the first full cargo from this facility on September 30, 2024. We plan to expand that capacity when additional Fast LNG units come online.
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 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.
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
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. 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.
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 is utilizing 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 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. We sold the first full cargo from this facility on September 30, 2024.
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 second 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 are in process of final commissioning.
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 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.
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 are in the process of final commissioning of our Santa Catarina Facility.
Previous wording
We intend to develop and operate an LNG facility and power plant on the Shannon Estuary, near Tarbert, Ireland. In April 2023, we were awarded a capacity contract for the development of a power plant for approximately 353 MW of electricity generation with a duration of ten years as part of the auction process operated by Ireland’s Transmission System Operator. The power plant is required to be operational by October 2026. In the third quarter of 2023, An Bord Pleanála, Ireland's planning commission, denied our application for the development of an LNG terminal and power plant. We are challenging this decision. The continued development of this project is uncertain and there are multiple risks, including regulatory risks, that could preclude the development of this project, and the results of these risks could have a material effect on our results of operations.
Current wording
We intend to develop and operate an LNG facility and power plant on the Shannon Estuary, near Tarbert, Ireland. In April 2023, we were awarded a capacity contract for the development of a power plant for approximately 353 MW of electricity generation with a duration of ten years as part of the auction process operated by Ireland’s Transmission System Operator. The power plant is required to be operational by October 2026.
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 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. 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
The Company recently launched Klondike, a power and data center development business dedicated to working with hyperscale customers to build and operate data centers. This venture comes in response to a significant need for turnkey digital infrastructure to support the next stage of explosive growth in artificial intelligence.
Current wording
We recently launched Klondike, a power and data center development business dedicated to working with hyperscale customers to build and operate data centers. This venture comes in response to a significant need for turnkey digital infrastructure to support the next stage of explosive growth in artificial intelligence.
Previous 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
Current wording
Results of Operations – Three Months Ended September 30, 2024 compared to Three Months Ended June 30, 2024 and Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023
Previous wording
Performance of our two segments, Terminals and Infrastructure and Ships, is evaluated based on Segment Operating Margin. Segment Operating Margin reconciles to Consolidated Segment Operating Margin as reflected below, which is a non-GAAP measure. We reconcile Consolidated Segment Operating Margin to GAAP Gross margin, inclusive of depreciation and amortization. Consolidated Segment Operating Margin is mathematically equivalent to Revenue minus Cost of sales (excluding depreciation and amortization reflected separately) minus Operations and maintenance minus Vessel operating expenses, each as reported in our financial statements. We believe this non-GAAP measure, as we have defined it, offers a useful supplemental measure of the overall performance of our operating assets in evaluating our profitability in a manner that is consistent with metrics used for management’s evaluation of the overall performance of our operating assets.
Current wording
Performance of our two segments, Terminals and Infrastructure and Ships, is evaluated based on Segment Operating Margin. Segment Operating Margin reconciles to Consolidated Segment Operating Margin as reflected below, which is a non-GAAP measure. We reconcile Consolidated Segment Operating Margin to GAAP Gross margin, inclusive of depreciation and amortization. Consolidated Segment Operating Margin is mathematically equivalent to Revenue minus Cost of sales (excluding depreciation and amortization reflected separately) minus Operations and maintenance minus
Previous 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:
Current wording
The tables below present our segment information for the three months ended September 30, 2024 and June 30, 2024, and for the nine months ended September 30, 2024 and September 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, 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.
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 losses of $0.3 million and realized gains of $141.6 million for the three and nine months ended September 30, 2023, respectively, were recognized as a reduction to Cost of sales in the segment measure. No such transactions were completed in 2024.
Previous wording
The Company recognized unrealized losses of $108.3 million on the mark-to-market value of derivative transactions for the six months ended June 30, 2023, and these losses reconcile Cost of sales in the segment measure to Cost of sales in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
Current wording
We recognized unrealized gains of $0.4 million and unrealized losses of $107.9 million on the mark-to-market value of derivative transactions for the three and nine months ended September 30, 2023, respectively, and these gains and losses reconcile Cost of sales in the segment measure to Cost of sales in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
Previous wording
The Company has excluded contract acquisition costs that do not meet the criteria for capitalization from the segment measure. Contract acquisition costs of$6.2 million for the six months ended June 30, 2023 are shown as a reduction to Cost of sales in the segment measure.
Current wording
We have excluded contract acquisition costs that do not meet the criteria for capitalization from the segment measure. Contract acquisition costs of$6.2 million for the nine months ended September 30, 2023 are shown as a reduction to Cost of sales in the segment measure. There were no contract acquisition costs incurred in 2024.
Previous 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.
Current wording
In 2023, the effective share of revenues, expenses and operating margin attributable to our 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
(5) Deferred earnings from contracted sales represent forward sales transactions that were contracted in the current period and prepayment for these sales was received. Revenue will be recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when delivery under these forward sales transactions is completed in the third and fourth quarters of 2024.
Current wording
(5) Deferred earnings from contracted sales represent forward sales transactions that were contracted in the current period and prepayment for these sales was received. Revenue will be recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when delivery under these forward sales transactions is completed from the fourth quarter of 2024 through 2025.
Previous 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.
Current wording
•Volumes delivered to downstream terminal customers were substantially consistent, increasing from 20.2 TBtu in the second quarter of 2024 to 20.7 TBtu in the third quarter of 2024.
Previous 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:
Current wording
Total revenue for the Terminals and Infrastructure Segment increased by $69.3 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, and the increase in revenue was primarily attributable to the following:
Previous wording
•For the six months ended June 30, 2024, volumes delivered to downstream customers were 42.1 TBtu as compared to 26.1 TBtu for the six months ended June 30, 2023. We delivered gas for two and half months for the grid stabilization project in Puerto Rico during the first half of 2024, while the project was just ramping up during the second quarter of 2023.
Current wording
•For the nine months ended September 30, 2024, volumes delivered to downstream customers were 62.8 TBtu as compared to 46.1 TBtu for the nine months ended September 30, 2023.
Previous 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.
Current wording
•The average Henry Hub index pricing used to invoice our downstream customers decreased by 22% for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Previous 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
Current wording
•The Company had$199.1 million in cargo sales for the nine months ended September 30, 2024. Revenue from cargos sales was$617.1 million for the nine months ended September 30, 2023.
Previous wording
Cost of sales decreased by $7.3 million for the three months ended June 30, 2024 as compared to the three months ended March 31, 2024, which was attributable to lower cost of gas purchased and volumes delivered. We delivered 8% less volumes to our downstream terminal customers during the three months ended June 30, 2024 compared to the three months ended March 31, 2024. Our cost to deliver natural gas volumes decreased to $6.42 per MMBtu for the three months ended June 30, 2024 from $6.96 per MMBtu for the three months ended March 31, 2024. After our FLNG asset is fully commissioned and operational, we expect to be able to produce materially cheaper LNG than the LNG purchased under our supply contracts.
Current wording
Cost of sales increased by $103.4 million for the three months ended September 30, 2024 as compared to the three months ended June 30, 2024, which was attributable to higher cost of gas purchased and cargo sales. Our cost to deliver natural gas volumes increased to$6.65 per MMBtu for the three months ended September 30, 2024 from$6.42 per MMBtu for the three months ended June 30, 2024. After our FLNG asset is fully commissioned and operational, we expect to be able to produce LNG at a lower cost than the LNG purchased under our supply contracts.
Previous 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:
Current wording
Cost of sales increased by $287.8 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, which was attributable to the following activity:
Previous 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.
Current wording
•We incurred increased cost of LNG purchased from third parties for sale to our downstream customers of $76.4 million during the nine months ended September 30, 2024 due to increased volumes delivered. We delivered 36% 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 nine months ended September 30, 2024 from $7.26 per MMBtu for the nine months ended September 30, 2023.
Previous 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.
Current wording
•We recognized payroll and other operating costs of $77.0 million to provide services under Genera's operations and maintenance contract for the nine months ended September 30, 2024 compared to $16.3 million for the nine months ended September 30, 2023; these costs are passed onto PREPA. Only one quarter of such costs were incurred during the nine months ended September 30, 2023 as our contract commenced on July 1, 2023.
Previous wording
•We incurred decreased cost of LNG purchased from third parties for LNG cargo sales of $162.2 million during the six months ended June 30, 2024 as our LNG cargo sale activity has been significantly lower in the first half of 2024.
Current wording
•We incurred decreased cost of LNG for LNG cargo sales during the nine months ended September 30, 2024 by $72.7 million as our LNG cargo sale activity has been significantly lower in the first three quarters of 2024.
Previous 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.
Current wording
•In the nine months ended September 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
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.
Current wording
The weighted-average cost of our LNG inventory balance to be used in our operations as of September 30, 2024 and December 31, 2023 was $7.46 per MMBtu and $7.33 per MMBtu, respectively.
Previous wording
In the second quarter of 2024, we completed forward sales receiving a prepayment from the buyer of $90.0 million. The prepayment was based on the fair market value of these sales as compared to our supply cost, and our CODM includes these results in his evaluation of Terminals and Infrastructure operations for the second quarter of 2024. Revenue for these sales will be recognized in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) asdeliveries under this contract will occur in the third and fourth quarters of 2024. Both the forward contracted sale and our supply contract are based on Henry Hub which mitigates the impact that changes in commodity pricing will have on our results of operations.
Current wording
In the second and third quarters of 2024, we completed forward sales receiving prepayments from the buyer of$90.0 million and$60.0 million respectively. The prepayment was based on the fair market value of these sales as compared to our supply cost, and our CODM includes these results in his evaluation of Terminals and Infrastructure operations. Revenue for these sales will be recognized in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) asdeliveries under this contract will occur in the fourth quarter of 2024 through 2025. A portion of these deferred earnings of$42.3 million were recognized upon delivery during the third quarter of 2024. Both the forward contracted sale and our supply contract are based on Henry Hub which mitigates the impact that changes in commodity pricing will have on our results of operations.
Previous 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.
Current wording
Total revenue for the Ships segment increased by$0.5 million during the three months ended September 30, 2024 compared to thethree months ended June 30, 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 $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.
Current wording
Total revenue for the Ships segment decreased $102.1 million for the nine months ended September 30, 2024 as compared to the nine months ended September 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 nine months ended September 30, 2024. We are now utilizing these vessels in our operations.
Previous wording
Vessel operating expenses remained consistent during the three months ended June 30, 2024 as compared to the three months ended March 31, 2024. There were no changes to the vessels that comprise the Ships segment in the second quarter of 2024.
Current wording
Vessel operating expenses remained consistent during the three months ended September 30, 2024 as compared to the three months ended June 30, 2024. There were no changes to the vessels that comprise the Ships segment in the third quarter of 2024.
Previous 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.
Current wording
Vessel operating expenses decreased $17.1 million for thenine months ended September 30, 2024 as compared to thenine months ended September 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
Selling, general and administrative increased by $33.4 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The increases were primarily due to increased share-based compensation expense. We recognized $25.2 million of share-based compensation expense for RSUs and other equity awards during the first half of 2024; no significant cost was recognized in the first half of 2023. In addition, the allowance for bad debt increased by$11.6 million due to an additional allowance recorded during the three months ended March 31, 2024.
Current wording
Selling, general and administrative increased $66.7 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The increase was primarily due to increased share-based compensation expense. We recognized $47.7 million of share-based compensation expense for RSUs and other equity awards during the first three quarters of 2024; no significant cost was recognized in the first three quarters of 2023. In addition, the allowance for bad debt increased by $11.6 million due to an additional allowance recorded during the three months ended March 31, 2024.
Previous 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.
Current wording
We did not incur significant transaction and integration costs for the three or nine months ended September 30, 2024.
Showing the first 40 of 71 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
In the third quarter of 2023, An Bord Pleanála, Ireland's planning commission, denied our application for the development of an LNG terminal and power plant. We challenged this decision, and in September 2024, the High Court of Ireland ruled that the ABP did not have appropriate grounds for the denial of our permit. The ABP has been directed to reconsider our permit application in accordance with Irish law. The continued development of this project is uncertain and there are multiple risks, including regulatory risks, that could preclude the development of this project, and the results of these risks could have a material effect on our results of operations.
Current report — wording carried from elsewhere
Vessel operating expenses, each as reported in our financial statements. We believe this non-GAAP measure, as we have defined it, offers a useful supplemental measure of the overall performance of our operating assets in evaluating our profitability in a manner that is consistent with metrics used for management’s evaluation of the overall performance of our operating assets.
Current report — wording carried from elsewhere
•The average Henry Hub index pricing used to invoice our downstream customers increased by 14% for the three months ended September 30, 2024 as compared to the three months ended June 30, 2024.
Current report — wording carried from elsewhere
We were in compliance with all covenants as of September 30, 2024.