EE 8-K/A
Excelerate Energy, Inc. (EE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Introductory Note
This Amendment No. 1 (this “Amendment”) amends the Original Form 8-K to include (i) the financial statements of NFE Jamaica required by Item 9.01(a) and (ii) the pro forma financial information of the Company required by Item 9.01(b). The Company had previously indicated in the Original Form 8-K that such financial statements and pro forma information would be provided no later than 71 days from the date on which the Original Form 8-K was required to be filed.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The audited financial statements of the NFE Parties’ Jamaican operations as of and for the fiscal year ended December 31, 2024 are attached as Exhibit 99.1 to this Amendment and incorporated by reference herein.
The unaudited financial statements of the NFE Parties’ Jamaican operations as of and for the three months ended March 31, 2025 are attached as Exhibit 99.2 to this Amendment and incorporated by reference herein.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined balance sheet of the Company as of March 31, 2025 and the unaudited pro forma condensed combined statements of operations of the Company for the three months ended March 31, 2025 and the year ended December 31, 2024, giving effect to the Acquisition and the related financing transactions described therein, are filed as Exhibit 99.3 to this Amendment and are incorporated by reference herein.
(d) Exhibits.
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Exhibit Number |
Description |
23.1 |
Consent of Ernst & Young LLP, independent auditors for NFE Jamaica. |
99.1 |
Audited combined financial statements of NFE Jamaica as of and for the year ended December 31, 2024. |
99.2 |
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99.3 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Excelerate Energy, Inc. |
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Date: |
July 29, 2025 |
By: |
/s/ Dana Armstrong |
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Dana Armstrong |
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the following Registration Statements:
of our report dated May 13, 2025, relating to the combined financial statements of NFE Jamaica as of and for the year ended December 31, 2024, appearing in this Current Report on Form 8-K/A of Excelerate Energy, Inc.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
July 29, 2025
EXHIBIT 99.1
Index to Combined Financial Statements
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Page |
Report of Independent Auditors |
F-2 |
Combined Balance Sheet |
F-3 |
Combined Statement of Operations |
F-4 |
Combined Statement of Changes in Equity |
F-5 |
Combined Statement of Cash Flows |
F-6 |
Notes to Combined Financial Statements |
F-8 |
Report of Independent Auditors
To the Board of Directors of New Fortress Energy Inc.
Opinion on the Financial Statements
We have audited the accompanying combined financial statements of NFE Jamaica (the Company), which comprise the combined balance sheet as of December 31, 2024, and the related combined statements of operations, changes in equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
May 13, 2025
NFE Jamaica
(A Business of New Fortress Energy Inc.)
Combined Balance Sheet
As of December 31, 2024
(in thousands of U.S. dollars)
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December 31, 2024 |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
8,457 |
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Restricted cash |
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629 |
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Receivables, net of allowances of $2,900 |
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85,639 |
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Inventory |
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14,992 |
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Prepaid expenses and other current assets |
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5,555 |
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Total current assets |
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115,272 |
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Property, plant and equipment, net |
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310,927 |
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Right-of-use assets |
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123,249 |
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Deferred tax assets, net |
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642 |
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Other non-current assets, net |
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31,765 |
Total assets |
$ |
581,855 |
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Liabilities |
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Current liabilities |
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Accounts payable |
$ |
4,486 |
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Current portion of long-term debt |
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13,136 |
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Accrued liabilities |
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7,059 |
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Current lease liabilities |
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16,759 |
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Interest payable due to affiliates |
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151,352 |
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Other current liabilities |
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2,056 |
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Total current liabilities |
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194,848 |
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Long-term debt |
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204,735 |
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Loans due to affiliates |
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54,842 |
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Non-current lease liabilities |
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107,469 |
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Deferred tax liabilities, net |
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22,867 |
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Other long-term liabilities |
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5,288 |
Total liabilities |
$ |
590,049 |
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Equity |
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Net parent deficit |
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(7,616) |
Total equity attributable to NFE Jamaica |
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(7,616) |
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Non-controlling interest |
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(578) |
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Total equity |
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(8,194) |
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Total liabilities and equity |
$ |
581,855 |
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F-3
NFE Jamaica
(A Business of New Fortress Energy Inc.)
Combined Statement of Operations
For the year ended December 31, 2024
(in thousands of U.S. dollars)
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Year Ended December 31, 2024 |
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Revenues |
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Operating revenues |
$ |
357,519 |
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Total revenues |
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357,519 |
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Operating expenses |
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Cost of sales (exclusive of depreciation shown separately below) |
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282,872 |
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Operations and maintenance |
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34,318 |
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Selling, general and administrative |
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36,230 |
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Depreciation and amortization |
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23,149 |
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Total operating expenses |
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376,569 |
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Operating loss |
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(19,050) |
Interest expense |
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35,825 |
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Other expenses, net |
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1,205 |
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Loss from continuing operations before income taxes |
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(56,080) |
Tax provision |
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23,198 |
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Loss from continuing operations |
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(79,278) |
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Net loss |
$ |
(79,278) |
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Net income attributable to non-controlling interest |
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(43) |
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Net loss attributable to NFE Jamaica |
$ |
(79,321) |
F-4
NFE Jamaica
(A Business of New Fortress Energy Inc.)
Combined Statement of Changes in Equity
For the year ended December 31, 2024
(in thousands of U.S. dollars)
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Net parent deficit |
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Non-controlling interest |
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Total equity |
Balances as of January 1, 2024 |
$ |
(21,612) |
$ |
(621) |
$ |
(22,233) |
Net income (loss) |
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(79,321) |
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43 |
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(79,278) |
Net transfers from Parent |
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93,317 |
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— |
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93,317 |
Balances as of December 31, 2024 |
$ |
(7,616) |
$ |
(578) |
$ |
(8,194) |
F-5
NFE Jamaica
(A Business of New Fortress Energy Inc.)
Combined Statement of Cash Flows
For the year ended December 31, 2024
(in thousands of U.S. dollars)
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Year Ended December 31, 2024 |
Cash flows from operating activities |
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Net loss |
$ |
(79,278) |
Adjustments for: |
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Amortization of deferred financing costs |
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878 |
Depreciation and amortization |
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23,149 |
Movement in credit loss allowances |
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6,486 |
Deferred taxes |
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22,634 |
Share-based compensation |
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5,014 |
Unrealized losses due to foreign currency, net |
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464 |
Other |
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871 |
Changes in operating assets and liabilities: |
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Decrease in receivables |
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20,093 |
Decrease in inventories |
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12,173 |
Decrease in prepayments/other assets |
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427 |
Decrease in right-of-use assets |
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16,590 |
Decrease in accounts payable |
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(18,567) |
Decrease in accrued liabilities |
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(3,535) |
Decrease in lease liabilities |
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(15,424) |
Increase in interest payable due to affiliates |
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20,433 |
Decrease in other liabilities |
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(15,092) |
Net cash used in operating activities |
$ |
(2,684) |
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Cash flows from investing activities |
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Capital expenditures |
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(2,895) |
Net cash used in investing activities |
$ |
(2,895) |
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Cash flows from financing activities |
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Proceeds from loans due to affiliates |
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12,431 |
Repayment of loans due to affiliates |
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(92,974) |
Principal payments on finance lease liabilities |
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(94) |
Net transfers from parent |
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88,302 |
Net cash provided by financing activities |
$ |
7,665 |
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Net increase in cash, cash equivalents and restricted cash |
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2,086 |
Cash, cash equivalents and restricted cash – beginning of year |
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7,000 |
Cash, cash equivalents and restricted cash – end of year |
$ |
9,086 |
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Cash paid for taxes |
$ |
2,416 |
Cash paid for interest |
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14,433 |
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Supplemental disclosure of non-cash investing and financing activities: |
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Changes in accounts payable and accrued liabilities associated with construction in progress additions |
$ |
76 |
F-6
The following table identifies the balance sheet line-items included in Cash and cash equivalents and Restricted cash presented in the Combined Statement of Cash Flows:
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Year Ended December 31, 2024 |
Cash and cash equivalents |
$ |
8,457 |
Restricted cash |
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629 |
Cash, cash equivalents and restricted cash – end of year |
$ |
9,086 |
F-7
1. Organization
New Fortress Energy Inc. (“NFE” or “Parent”) is a global energy infrastructure company founded to help address energy poverty and accelerate the world’s transition to reliable, affordable and clean energy. NFE owns and operates natural gas and liquefied natural gas (“LNG”) infrastructure, ships and logistics assets to rapidly deliver turnkey energy solutions to global markets. NFE has liquefaction, regasification and power generation operations in the United States, Jamaica, Brazil and Mexico.
On March 27, 2025, NFE announced the execution of an agreement to sell its assets and operations in Jamaica (“NFE Jamaica” or the “Company”). The principal activities of the Company are the operation of an LNG regasification facility in Montego Bay, operation of an offshore LNG regasification and storage facility in Old Harbour, operation of dual-fired combined heat and power facility in Clarendon, and sale of LNG and natural gas to industrial end-user customers in Jamaica.
2. Significant accounting policies
The principal accounting policies adopted are set out below.
The accompanying Combined Financial Statements present, on a historical basis, the results of operations, financial position, and cash flows of the Company. The Combined Financial Statements have been prepared from the Parent’s historical accounting records and presented as if the Company had operated on a standalone basis throughout the periods presented. Historically, separate financial statements have not been prepared for the Company, and it has not operated as a stand-alone business from the Parent. The Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
All intracompany transactions have been eliminated. Transactions between the Company and the Parent have been included in these Combined Financial Statements and are considered related party transactions (refer to Note 14, Related party transactions). All balances and transactions among the Company and Parent that are not expected to be cash-settled are included in Net parent deficit on the Combined Balance Sheet.
Net parent deficit is shown in lieu of equity in the Combined Financial Statements and represents the Parent’s interest in the recorded net assets of the Company, as well as the cumulative investment (deficit) by the Parent in the Company through the dates presented, inclusive of operating results.
Non-controlling interests are classified as a separate component of equity on the Combined Balance Sheet and Combined Statement of Changes in Equity. Additionally, Net income attributable to non-controlling interests are reflected separately from Net loss in the Combined Statement of Operations and Combined Statement of Changes in Equity. Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the controlling and non-controlling interests.
F-8
The Combined Financial Statements include all revenues and costs that are directly attributable or reasonably allocable to the Company. The Parent provides certain services to the Company, such as human resources, finance, tax, accounting, legal, regulatory and compliance, information technology, logistics and marketing (refer to Note 14, Related party transactions). The cost of these services was allocated primarily based on the Company’s proportion of revenue of the Parent. Management considers these allocations to be a reasonable reflection of the Company’s utilization of services or the benefit received. However, the allocations may not be indicative of the actual expenses that the Company would have incurred had it operated historically as an independent, stand-alone entity, nor are they indicative of the Company’s future expenses. The historical results of operations, financial position and cash flows presented in these Combined Financial Statements may not be indicative of what they would have been had the Company been an independent stand-alone entity, nor are they necessarily indicative of the Company’s future results of operations, financial position, and cash flows.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Combined Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Management evaluates its estimates and related assumptions regularly. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.
Functional and presentation currency
Transactions and balances included in the Combined Financial Statements of the Company are measured using the currency of the primary economic environment in which the entity operates, the U.S. dollar (the “functional currency"). As such, the Combined Financial Statements are presented in U.S. dollars.
Transactions and balances
Monetary assets and liabilities denominated in currencies other than U.S. dollars are remeasured at the rate of exchange in effect at the Combined Balance Sheet date. Non-monetary assets and liabilities and transactions denominated in currencies other than U.S. dollars are recorded at the rate of exchange in effect at the date of the transaction. Exchange differences on foreign currency transactions are recognized in the Combined Statement of Operations in Other expenses, net. Exchange rates are determined by the published weighted average daily rate at which commercial banks trade in foreign currencies.
The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company believes the carrying amounts of cash and cash equivalents approximated their fair value as of December 31, 2024 and are classified as Level 1 within the fair value hierarchy.
Restricted cash consists of funds that are contractually restricted as to usage or withdrawal and have been presented separately from cash and cash equivalents on the Combined Balance Sheet.
As of December 31, 2024, restricted cash consisted of cash restricted for performance and customs bonds.
F-9
Receivables are contractual rights to receive cash on a fixed or determinable date and are recognized on the Combined Balance Sheet as the amount invoiced to the customer, net of an allowance for current expected credit losses. Accounts receivable is carried at amortized cost. Amounts are written off against the allowance when management is certain that outstanding amounts will not be collected. For the year ending December 31, 2024, amounts written off were $6,794. The Company estimates expected credit losses based on relevant information about the current credit quality of customers, past events, including historical experience and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit loss expense, inclusive of credit loss expense on all categories of financial assets, is recorded within Selling, general and administrative in the Combined Statement of Operations. The Company believes the carrying amounts of accounts receivable, as well as accounts payable, approximated their fair value as of December 31, 2024 and are classified as Level 1 within the fair value hierarchy.
Receivables outstanding as of December 31, 2022 due from Jamalco, a bauxite mining and alumina producer in Jamaica, under the terms of the gas sales agreement (“GSA”) were recognized in the ordinary course of business. As of December 31, 2024, $32,831 of these receivables remains outstanding. Receivables outstanding are contractually due and payable by Jamalco, and the Company is actively pursuing the collection of these receivables. While the Company believes these receivables are collectible, based on the length of time these receivables have been outstanding, there is a risk that the full amount of these receivables will not be recovered, and this amount could be material to these Combined Financial Statements.
Inventory is primarily comprised of LNG and natural gas, bunker fuel, automotive diesel oil, and spare parts. These items are recorded on a weighted average cost basis and stated at the lower of cost or net realizable value. Materials and other inventory are recorded at cost. Changes in the value of inventory are recorded within Cost of sales in the Combined Statement of Operations. LNG is subject to “boil-off,” a natural depletion of gas volume over time when LNG is exposed to environments with temperatures above its optimum storage state. Boil-off losses are expensed through Cost of sales in the Combined Statement of Operations in instances where gas cannot be contained and recycled back into the production process.
Property, plant and equipment is initially recorded at cost. Expenditures for construction activities and betterments that extend the useful life of the asset are capitalized. Expenditures for routine maintenance and repairs are charged to expense as incurred within Operations and maintenance in the Combined Statement of Operations.
Major maintenance and overhauls of the Company’s terminals are capitalized and depreciated over the expected period until the next anticipated major maintenance or overhaul.
The Company depreciates property, plant and equipment less the estimate residual value using the straight-line depreciation method over the estimated economic life of the asset or lease term, whichever is shorter using the following useful lives:
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Useful Life (Yrs) |
Retirement cost |
20 |
Gas pipelines |
4-24 |
Terminals |
4-24 |
Power facilities |
4-20 |
Other equipment |
3-25 |
The Company reviews the remaining useful life of its assets on a regular basis to determine whether changes have taken place that would suggest that a change to depreciation policies is warranted.
F-10
Upon retirement or disposal of property, plant and equipment, the cost and related accumulated depreciation are removed from the account, and the resulting gains or losses, if any, are recorded in the Combined Statement of Operations.
AROs are recognized for legal obligations associated with the retirement of long-lived assets that result from the acquisition, leasing, construction, development and/or normal use of the assets and for conditional AROs in which the timing or method of settlement are conditional on a future event. The fair value of a liability for an ARO is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made and is accreted to its final value over the life of the liability. The initial fair value of the liability is added to the carrying amount of the associated asset. This additional carrying amount is depreciated over the estimated useful life of the asset.
The Company estimates the fair value of the ARO liability based on the present value of expected cash flows using a credit-adjusted risk-free rate. Liabilities for AROs may be incurred over more than one reporting period if the events that create the obligation occur over more than one period or if estimates change. There were no settlements of AROs during the year ended December 31, 2024.
The Company performs a recoverability assessment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indicators may include, but are not limited to, adverse changes in the regulatory environment in a jurisdiction where the Company operates, unfavorable events impacting the supply chain for LNG to the Company’s operations, a decision to discontinue the development of a long-lived asset, early termination of a significant customer contract, or the introduction of newer technology.
When performing a recoverability assessment, the Company measures whether the estimated future undiscounted net cash flows expected to be generated by the asset exceed its carrying value. In the event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge.
Management develops the assumptions used in the recoverability assessment based on active contracts, current and future expectations of the global demand for LNG and natural gas, as well as information received from third party industry sources.
In the course of business, the Company may obtain identifiable intangible assets. Intangible assets with a finite life are amortized over the estimated useful life of the asset under the straight-line method.
Indefinite lived intangible assets are not amortized. Intangible assets with an indefinite useful life are tested for impairment on an annual basis or more frequently if changes in circumstances indicate that it is more likely than not that the asset is impaired. Indefinite lived intangible assets are evaluated for impairment either under the qualitative assessment option or the two-step quantitative test. If the carrying amount of an intangible asset being tested for impairment exceeds its fair value, the excess is recognized as impairment expense in the Combined Statement of Operations.
Management evaluates the terms of the Company’s debt arrangements to determine whether they contain an embedded derivative that is required to be bifurcated. Any embedded derivatives that are required to be bifurcated are recorded at fair value on the Combined Balance Sheet.
F-11
Costs directly related to the issuance of debt are reported on the Combined Balance Sheet as a reduction from the carrying amount of the recognized debt liability and amortized over the term of the debt using the effective interest method. Interest and related amortization of debt issuance costs recognized during major development and construction projects are capitalized and included in the cost of the project.
The Company may be involved in tax, legal and other administrative actions in the ordinary course of business, including governmental and administrative investigations, inquiries and proceedings concerning employment, labor, environmental, tax and other claims. The Company recognizes a loss contingency in the Combined Financial Statements when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. The Company discloses any loss contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred. Gain contingencies are not recorded until realized.
The Company’s contracts with customers may contain one or several performance obligations usually consisting of the sale of LNG, natural gas, power or steam, which is an output from the Company’s natural gas-fueled infrastructure. The transaction price for each of these contracts is structured using similar inputs and factors regardless of the output delivered to the customer. The customers consume the benefit of the natural gas, power and steam when they are delivered by the Company to the customer’s power generation facilities or interconnection facility. Natural gas, power and steam qualify as a series with revenue being recognized over time using an output method, based on the quantity of natural gas, power or steam that the customer has consumed. LNG is delivered in containers transported by truck to customer sites and an unloading point specified in a contract. Revenue from sales of LNG is recognized at the point in time at which control of the transfer to the customer, depending on the terms of the contract. Because the nature, timing and uncertainty of revenue and cash flows are substantially the same for LNG, natural gas, power and steam, the Company has presented Operating revenue on an aggregated basis.
The Company has concluded that variable consideration included in its agreements meets the exception for allocating variable consideration. As such, the variable consideration for these contracts is allocated to each distinct unit of LNG, natural gas, power or steam delivered and recognized when that distinct unit is delivered to the customer.
The Company’s contracts with customers to supply LNG may contain a lease of equipment, which may be accounted for as an operating lease. For operating leases, the Company has elected the practical expedient to combine revenue for the sale of LNG and operating lease income as the timing and pattern of transfer of the components are the same. The Company has concluded that the predominant component of the transaction is the sale of LNG and therefore has not separated the lease component. The lease component of such operating leases is recognized as Operating revenue in the Combined Statement of Operations.
The timing of revenue recognition, billings and cash collections results in receivables. Receivables represent unconditional rights to consideration.
Shipping and handling costs are not considered to be separate performance obligations. All such shipping and handling activities are performed prior to the customer obtaining control of the LNG.
The Company collects sales taxes from its customers based on sales of taxable products and remits such collections to the appropriate taxing authority. The Company has elected to present sales tax collections in the Combined Statement of Operations on a net basis and, accordingly, such taxes are excluded from reported revenues.
The Company elected the practical expedient under which the Company does not adjust consideration for the effects of a significant financing component for those contracts where the Company expects at contract
F-12
inception that the period between transferring goods to the customer and receiving payment from the customer will be one year or less.
The Company has entered into lease agreements primarily for the use of vessels, marine port space, office space, land, and equipment. Right-of-use (“ROU”) assets recognized for these leases represent the Company’s right to use an underlying asset for the lease term, and the lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term.
Leases with terms of 12 months or less are excluded from ROU assets and lease liabilities on the Combined Balance Sheet, and short-term lease payments are recognized on a straight-line basis over the lease term. Variable payments under short-term leases are recognized in the period in which the obligation that triggers the variable payment becomes probable.
The Company, as lessee, has also elected the practical expedient not to separate lease and non-lease components for marine port space, office space, land and equipment leases. The Company separates the lease and non-lease components for vessel leases. The allocation of lease payments between lease and non-lease components has been determined based on the relative fair value of each component. The fair value of the lease component is estimated based on the estimated standalone price to lease a bareboat vessel. The fair value of the non-lease component is estimated based on the estimated standalone price of operating the respective vessel, inclusive of the costs of the crew and other operating costs. Additionally, the Company has elected the land easement practical expedient, which allows the Company to continue to account for pre-existing land easements as intangible assets under the accounting policy that existed before adoption of ASC 842 Leases.
The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the Combined Financial Statements carrying amounts and the tax bases of assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s Combined Balance Sheet as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.
The Company recognizes the effect of tax positions only if those positions are more likely than not of being sustained. Recognized tax positions are measured at the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement with the relevant tax authority. Conclusions reached regarding tax positions are continually reviewed based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports interest and penalties relating to an underpayment of income taxes, if applicable, as a component of income tax expense.
The Company’s operations have historically been included in the U.S. federal and state income tax filings of NFE. In these combined financial statements, the Company’s income tax provision has been computed and presented under the separate return method. Under this method, the Company is assumed to file hypothetical separate returns with the tax authorities and report deferred taxes on temporary differences and on any carryforwards that it could claim on its hypothetical returns. Current income tax liabilities are assumed to be immediately settled with NFE against the net parent deficit account.
F-13
3. Revenue recognition
Operating revenue in the Combined Statement of Operations includes revenue from sales of LNG and natural gas, as well as outputs from the Company’s natural gas-fueled power generation facilities, including power and steam.
Under most customer contracts, invoicing occurs once the Company’s performance obligations have been satisfied, at which point payment is unconditional. As of December 31, 2024, all receivables were related to revenue from contracts with customers totaling $85,639, and were included in Receivables, net of allowances on the Combined Balance Sheet. This balance is net of current expected credit losses of $2,900.
|
|
Allowance for Current Expected Credit Losses |
Balance as of January 1, 2024 |
$ |
3,214 |
Net change in allowance |
|
(314) |
Balance as of December 31, 2024 |
$ |
2,900 |
Contract assets are comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent periods. Contract liabilities reflect unconditional payments due or paid under the contracts with customers prior to the Company’s satisfaction of the related performance obligations. The contract assets and contract liabilities balances as of December 31, 2024 are detailed below:
|
|
December 31, 2024 |
Contract assets – current |
$ |
361 |
Contract assets, net – non-current |
|
5,069 |
Total contract assets, net |
$ |
5,430 |
|
|
|
Contract liabilities – current |
$ |
1,645 |
Contract liabilities – non-current |
|
— |
Total contract liabilities, net |
$ |
1,645 |
|
|
|
Revenue recognized in the year from: |
|
|
Amounts included in contract liabilities at the beginning of the year |
$ |
668 |
No material credit losses are expected for contract assets as of December 31, 2024.
The Company has recognized costs to fulfill contracts with customers, which primarily consist of expenses required to enhance resources to deliver under agreements with these customers. These costs can include set-up and mobilization costs incurred ahead of the service period, and such costs will be recognized on a straight-line basis over the expected term of the agreement. As of December 31, 2024, the Company has capitalized $9,170, of which $604 of these costs is presented within Prepaid expenses and other current assets, and $8,566 is presented within Other non-current assets, net on the Combined Balance Sheet.
F-14
Transaction price allocated to remaining performance obligations
Some of the Company’s contracts are short-term in nature with a contract term of less than a year. The Company applied the optional exemption not to report any unfulfilled performance obligations related to these contracts.
The Company has arrangements in which LNG, natural gas or outputs from the Company’s power generation facilities are sold on a “take-or-pay” basis whereby the customer is obligated to pay for the minimum guaranteed volumes even if it does not take delivery. The price under these agreements is typically based on a market index plus a fixed margin. The fixed transaction price allocated to the remaining performance obligations under these arrangements represents the fixed margin multiplied by the outstanding minimum guaranteed volumes. The Company expects to recognize this revenue over the following time periods. The pattern of recognition reflects the minimum guaranteed volumes in each period:
Period |
|
Revenue |
2025 |
$ |
257,574 |
2026 |
|
257,605 |
2027 |
|
255,961 |
2028 |
|
250,823 |
2029 |
|
246,925 |
Thereafter |
|
2,283,178 |
Total |
$ |
3,552,066 |
For all sales contracts that have a term exceeding one year, the Company has elected the practical expedient in ASC 606 under which the Company does not disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. For these excluded contracts, the sources of variability are (a) the market index prices of natural gas used to price the contracts, and (b) the variation in volumes that may be delivered to the customer. Both sources of variability are expected to be resolved at or shortly before delivery of each unit of LNG, natural gas, or power. As each unit of LNG, natural gas, or power represents a separate performance obligation, future volumes are wholly unsatisfied.
Customer concentrations
For the year ended December 31, 2024, revenue from two significant customers constituted 82% of total revenue, respectively. No other customer comprised of more than 10% of the Company’s revenues.
For the year ended December 31, 2024, revenue from external customers were entirely derived from customers located in Jamaica. As of December 31, 2024, all of the Company’s long-lived assets were located in Jamaica.
4. Leases, as lessee
The Company has operating leases primarily for the use of vessels, marine port space, office space, land, and equipment under non-cancellable lease agreements. The Company’s leases may include multiple optional renewal periods that are exercisable solely at the Company’s discretion. Renewal periods are included in the lease term when the Company is reasonably certain that renewal options would be exercised, and the associated lease payments are reflected in the ROU asset and lease liability.
The Company’s leases include fixed lease payments which may include escalation terms based on a fixed percentage or may vary based on an inflation index or other market adjustments. Escalation resulting from changes in inflation indices and market adjustments, as well as other lease costs that depend on the use of the underlying asset, are not considered lease payments when calculating the lease liability or ROU asset. Instead, such payments are accounted for as variable lease cost when the condition that triggers the variable payment becomes probable. The Company also has a component of lease payments that are variable related
F-15
to the LNG vessels, in which the Company may receive credits based on the performance of the LNG vessels during the period.
Right-of-use assets, Current lease liabilities, and Non-current lease liabilities as of December 31, 2024 were as follows:
|
|
December 31, 2024 |
Operating right-of-use-assets |
$ |
122,850 |
Finance right-of-use-assets (1) |
|
399 |
Total Right-of-use assets |
$ |
123,249 |
|
|
|
Current lease liabilities: |
|
|
Operating lease liabilities |
$ |
16,659 |
Finance lease liabilities |
|
100 |
Total Current lease liabilities |
$ |
16,759 |
Non-current lease liabilities: |
|
|
Operating lease liabilities |
$ |
107,404 |
Finance lease liabilities |
|
65 |
Total Non-current lease liabilities |
$ |
107,469 |
(1) Finance lease ROU assets are recorded net of accumulated amortization of $113 as of December 31, 2024.
For the year ended December 31, 2024, the Company’s operating lease cost recorded within the Combined Statement of Operations was as follows:
|
|
Year Ended December 31, 2024 |
Fixed lease cost |
$ |
28,477 |
Variable lease cost |
|
84 |
Short-term lease cost |
|
8 |
|
|
|
Lease cost - Cost of sales |
$ |
26,981 |
Lease cost - Operations and maintenance |
|
881 |
Lease cost - Selling, general and administrative |
|
707 |
Cash paid for operating leases is reported in operating activities in the Combined Statement of Cash Flows. Supplemental cash flow information related to leases was as follows for the year ended December 31, 2024:
|
|
Year Ended December 31, 2024 |
Operating cash outflows for operating lease liabilities |
$ |
27,429 |
Financing cash outflows for finance lease liabilities |
|
94 |
F-16
The future payments due under operating leases as of December 31, 2024, are as follows:
|
|
Operating Leases |
2025 |
$ |
25,841 |
2026 |
|
22,396 |
2027 |
|
22,407 |
2028 |
|
22,479 |
2029 |
|
22,431 |
Thereafter |
|
46,807 |
Total lease payments |
$ |
162,361 |
Less: effects of discontinuing |
|
38,133 |
Present value of lease liabilities |
|
124,228 |
|
|
|
Current lease liabilities |
$ |
16,759 |
Non-current lease liabilities |
|
107,469 |
As of December 31, 2024, the weighted-average remaining lease term for operating leases was 7.0 years and finance leases was 1.7 years. Because the Company generally does not have access to the rate implicit in the lease, the incremental borrowing rate is utilized as the discount rate. The weighted average discount rate associated with operating leases and finance leases as of December 31, 2024 was 8.1% and 5.0%, respectively.
5. Inventory
As of December 31, 2024, Inventory consisted of the following:
|
|
December 31, 2024 |
LNG and natural gas inventory |
$ |
5,489 |
Automotive diesel oil inventory |
|
7,340 |
Bunker fuel, materials, supplies and other |
|
2,163 |
Total Inventory |
$ |
14,992 |
Inventory is adjusted to the lower of cost or net realizable value. Changes in the value of inventory are recorded within Cost of sales in the Combined Statement of Operations.
6. Prepaid expenses and other current assets
As of December 31, 2024, Prepaid expenses and other current assets were as follows:
|
|
December 31, 2024 |
Prepaid expenses |
$ |
557 |
Recoverable taxes |
|
1,608 |
Other current assets |
|
3,390 |
Total Prepaid expenses and other current assets |
$ |
5,555 |
Other current assets consists of finance lease assets, contract assets, costs to fulfill, and deposits.
F-17
7. Property, plant and equipment, net
As of December 31, 2024, the Company’s Property, plant and equipment, net was as follows:
|
|
December 31, 2024 |
Gas pipelines |
$ |
66,319 |
Terminals |
|
232,518 |
Power facilities |
|
123,310 |
Construction in progress |
|
1,691 |
Other equipment |
|
23,507 |
Gross property, plant and equipment |
|
447,345 |
Accumulated depreciation |
|
(136,418) |
Total Property, plant and equipment, net |
$ |
310,927 |
Depreciation expense for the year ended December 31, 2024 totaled $23,085.
8. Other non-current assets, net
As of December 31, 2024, Other non-current assets, net consisted of the following:
|
|
December 31, 2024 |
Contract assets, net (Note 3) |
$ |
5,069 |
Costs to fulfill (Note 3) |
|
8,566 |
Other assets |
|
18,130 |
Total Other non-current assets, net |
$ |
31,765 |
9. Accrued liabilities
As of December 31, 2024, Accrued liabilities were as follows:
|
|
December 31, 2024 |
Accrued bonuses |
$ |
1,363 |
Accrued interest |
|
1,407 |
Other accrued expenses |
|
4,289 |
Total Accrued liabilities |
$ |
7,059 |
10. Other current liabilities
As of December 31, 2024, Other current liabilities were as follows:
|
|
December 31, 2024 |
Income tax payable |
$ |
83 |
Contract liabilities (Note 3) |
|
1,645 |
Other current liabilities |
|
328 |
Total Other current liabilities |
$ |
2,056 |
F-18
11. Debt
As of December 31, 2024, Long-term debt consisted of the following:
|
|
December 31, 2024 |
South Power 2029 Bonds |
$ |
217,871 |
Total debt |
|
217,871 |
Total Current portion of long-term debt |
|
13,136 |
Total Long-term debt |
$ |
204,735 |
Long-term debt is recorded at amortized cost on the Combined Balance Sheet. The fair value of the Company’s Long-term debt is $224,986 as of December 31, 2024. The Company utilizes a discounted cash flow approach with Level 2 inputs within the fair value hierarchy to calculate the fair value.
Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. Level 1 includes observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2 includes inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs.
The Company’s outstanding debt as of December 31, 2024 is repayable as follows:
|
|
December 31, 2024 |
2025 |
$ |
13,136 |
2026 |
|
26,271 |
2027 |
|
26,271 |
2028 |
|
26,271 |
2029 |
|
129,875 |
Thereafter |
|
— |
Total debt |
$ |
221,824 |
Less: Deferred finance charges |
|
3,953 |
Total debt, net of deferred financing charges |
$ |
217,871 |
South Power 2029 Bonds
In January 2022, NFE South Power Holdings Limited (“South Power”) entered into an agreement for the issuance of up to $285,000 secured bonds (“South Power 2029 Bonds”). The South Power 2029 Bonds are secured by, amongst other things, the Company’s combined heat and power plant in Clarendon, Jamaica (“CHP Plant”), and NFE has provided a guarantee of the obligations under the South Power 2029 Bonds. As of December 31, 2024, South Power had $221,824 of South Power 2029 Bonds issued and outstanding.
The South Power 2029 Bonds bear interest at an annual fixed rate of 6.5% and shall be partially repaid in quarterly installments beginning in August 2025 with the final repayment date in May 2029. Interest payments on outstanding principal balances are due quarterly.
South Power is required to comply with certain financial covenants as well as customary affirmative and negative covenants, including that the South Power 2029 Bonds are redeemable upon a change in control. The South Power 2029 Bonds also provide for customary events of default, prepayment and cure provisions. The Company was in compliance with all covenants as of December 31, 2024.
As of December 31, 2024, the remaining unamortized deferred financing costs for the South Power 2029 Bonds was $3,953.
F-19
Interest Expense
Interest expense recognized for the year ended December 31, 2024 consisted of the following:
|
|
Year Ended December 31, 2024 |
Interest on debt |
$ |
14,514 |
Interest on loans due to affiliates |
|
20,433 |
Amortization of debt issuance costs and discounts |
|
878 |
Total Interest expense |
$ |
35,825 |
12. Income taxes
The components of the Company’s loss before income taxes for the year ended December 31, 2024 was as follows:
|
|
Year Ended December 31, 2024 |
Domestic |
$ |
(56,080) |
Loss before taxes |
$ |
(56,080) |
Income tax expense is comprised of the following for the year ended December 31, 2024:
|
|
Year Ended December 31, 2024 |
Current: |
|
|
Domestic |
$ |
564 |
Total current tax expense |
|
564 |
Deferred: |
|
|
Domestic |
|
22,634 |
Total deferred tax expense |
|
22,634 |
Total provision for income taxes |
$ |
23,198 |
Effective Tax Rate
A reconciliation of Jamaica statutory income tax rate to the Company’s effective tax rate is as follows:
|
|
Year Ended December 31, 2024 |
Income tax at the statutory rate |
|
25.00% |
Tax rate differential |
|
3.43% |
Non-taxable income or expense |
|
(0.32)% |
Change in valuation allowance |
|
(67.66)% |
Impact of statutory accounting |
|
(6.62)% |
Other |
|
4.80% |
Effective income tax rate |
|
(41.37)% |
F-20
The tax effect of each type of temporary difference and carryforward that give rise to a significant deferred tax asset or liability as of December 31, 2024 are as follows:
|
|
Year Ended December 31, 2024 |
Deferred tax assets |
|
|
Accrued interest |
$ |
43,364 |
Net operating loss carryforward |
|
55,816 |
Lease liabilities |
|
30,957 |
Other |
|
2,636 |
Total deferred tax assets |
|
132,773 |
Valuation allowance |
|
(80,448) |
Deferred tax assets, net of valuation allowance |
$ |
52,325 |
|
|
|
Deferred tax liabilities |
|
|
Property, plant and equipment |
$ |
43,837 |
Right-of-use assets |
|
30,713 |
Total deferred tax liabilities |
$ |
74,550 |
Net deferred tax liabilities |
$ |
22,225 |
Tax Attributes
Jamaica
As of December 31, 2024, the Company has approximately $184,916 of net operating loss carryforwards. The Jamaica net operating losses are generally allowed to be carried forward indefinitely and can offset up to 50 percent of future taxable income.
Valuation Allowances
The following table summarizes the changes in the Company’s valuation allowance on deferred tax assets for the year ended December 31, 2024:
|
|
Year Ended December 31, 2024 |
Balance at the beginning of the period |
$ |
42,504 |
Recognized in the income tax provision |
|
37,944 |
Balance at the end of the period |
$ |
80,448 |
Income Tax Examinations
The Company files income tax returns in Jamaica and Barbados. The Jamaica corporate income tax returns filed for tax years 2018, 2019, 2020, 2021, 2022 and 2023 are open for examination. The Company is generally open to tax examinations in Jamaica for a period of six years from the filing of the income tax return
Undistributed Earnings
The Company has not recorded a deferred tax liability for undistributed earnings for any controlled foreign corporation as of December 31, 2024. The Company has unremitted earnings in certain jurisdictions where distributions can be made at no net tax cost. From time to time, the Company may remit these earnings. The Company has the ability and intent to indefinitely reinvest any earnings that cannot be remitted at no net tax cost. It is not practicable to estimate the amount of any additional taxes which may be payable on these undistributed earnings.
Other taxes
F-21
Certain entities may be subject to payroll taxes, excise taxes, property taxes, sales and use taxes, in addition to income taxes in countries in which they conduct business. In addition, certain subsidiaries are exposed to local state taxes, such as franchise taxes. Local state taxes that are not income taxes are recorded within Selling, general and administrative in the Combined Statement of Operations.
13. Commitments and contingencies
The Company is subject to certain tax, legal and regulatory proceedings, claims and disputes that arise in the ordinary course of business. The Company does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.
14. Related party transactions
The Company has not historically operated as a stand-alone business and the Combined Financial Statements are derived from the consolidated financial statements and accounting records of the Parent. The following disclosure summarizes activity between the Company and the Parent.
Allocation of Parent corporate expenses
The Combined Statement of Operations and Combined Statement of Cash Flows include an allocation of costs for certain services provided by the Parent to the Company, such as human resources, finance, tax, accounting, legal, regulatory and compliance, information technology, and marketing. The cost of these services was allocated to the Company based on the proportion of revenue and headcount. The allocation amounted to $25,837 for the year ended December 31, 2024.
The Combined Financial Statements do not necessarily include all of the expenses that would have been incurred by the Company had it been an independent, stand-alone company. It is not practicable to estimate actual costs that would have been incurred had the Company been an independent, stand-alone company during the periods presented. Management considers these allocations to be a reasonable reflection of the Company’s utilization of services or the benefit received.
DevTech investment
In 2018, the Company entered into a consulting arrangement with DevTech Environment Limited (“DevTech”) to provide business development services to increase the customer base of the Company. DevTech also contributed cash consideration in exchange for a 10% interest in a consolidated subsidiary. The 10% interest was reflected as non-controlling interest in the Company’s Combined Financial Statements. The Company recognized approximately $537 in expense within Selling, general and administrative for the year ended December 31, 2024. As of December 31, 2024 $149 was due to DevTech.
Loans due to affiliates
As of December 31, 2024, the Company had loans from the Parent of $54,842 with maturities ranging from 2041 to 2043 and an interest rate of 9.0%. Interest expense on loans due to affiliates for the year ended December 31, 2024 was $20,433. The Interest payable due to affiliates is due within one year.
The associated interest expense payable outstanding is presented as current, as the terms of the shareholder loan agreements detail that interest expense is due within one year. However, the Parent has provided a letter stating payments of current and future interest due will not be required, and none are contemplated to support the Parent’s liquidity, within one year of the date these Combined Financial Statements are available to be issued.
Net parent deficit
Net parent deficit in the Combined Balance Sheet and Combined Statement of Changes in Equity represents the Parent’s historical investment in the Company, the net effect of transactions with, and allocations from,
F-22
the Parent, and the Company’s accumulated losses. Net transfers from Parent are included within Net parent deficit in the Combined Balance Sheet.
The components of the Net transfers from Parent were as follows:
|
|
Year Ended December 31, 2024 |
Financing activities (cash inflow) |
$ |
67,480 |
Costs allocated from Parent centralized shared corporate functions (cash inflow) |
|
25,837 |
Net transfers from Parent as reflected in the Combined Statement of Changes in Equity |
|
93,317 |
Share-based compensation (non-cash activity) |
|
(5,014) |
Net transfers from Parent as reflected in the Combined Statement of Cash Flows |
$ |
88,302 |
Transactions with Parent:
During the normal course of operations, the Company routinely purchases LNG from the Parent. During the year ended December 31, 2024, the Company purchased LNG, totaling $244,827 which is recognized within Cost of sales in the Combined Statement of Operations.
Lease Agreement
Beginning in 2021, the Company incurred costs arising from the lease of the Hoegh Gallant (“Gallant”) vessel, which was leased from NFE International Shipping LLC. The Gallant is the primary asset that performs the storage and regasification activities at the offshore facility at Old Harbour, Jamaica. The Company recognized $21,890 of lease expense related to the Gallant for the year ended December 31, 2024. The operating Right-of-use asset, net and Lease liability were $116,466 and $116,374 as of the year ended December 31, 2024.
15. Subsequent events
On March 26, 2025, the Parent entered into an equity and asset purchase agreement to sell NFE Jamaica for cash consideration of approximately $1.1 billion, subject to certain purchase price adjustments.
On May 5, 2025, the Company provided a notice of repurchase of the 2029 South Power Bonds and related syndicated loan facility, a $30 million debt being prepaid simultaneously with the bonds. The Company will repurchase the 2029 South Power Bonds at 101% of the outstanding principal amount plus accrued and unpaid interest. The repurchase will be completed concurrently with the closing of the sale of NFE Jamaica, and the Parent will utilize proceeds received from the sale of NFE Jamaica to complete the repurchase.
The Company has evaluated subsequent events through May 13, 2025, the date on which the Combined Financial Statements were issued.
F-23
EXHIBIT 99.2
Index to Condensed Combined Financial Statements
|
Page |
Condensed Combined Balance Sheet |
F-2 |
Condensed Combined Statement of Operations |
F-3 |
Condensed Combined Statement of Changes in Equity |
F-4 |
Condensed Combined Statement of Cash Flows |
F-5 |
Notes to Condensed Combined Financial Statements |
F-7 |
NFE Jamaica
(A Business of New Fortress Energy Inc.)
Condensed Combined Balance Sheet
As of March 31, 2025
(in thousands of U.S. dollars)
|
March 31, 2025 |
||
Assets |
|
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
8,558 |
|
Restricted cash |
|
636 |
|
Receivables, net of allowances of $2,972 |
|
87,106 |
|
Inventory |
|
40,532 |
|
Prepaid expenses and other current assets |
|
7,306 |
|
Total current assets |
|
144,138 |
|
|
|
|
|
Property, plant and equipment, net |
|
307,312 |
|
Right-of-use assets |
|
118,828 |
|
Deferred tax assets, net |
|
651 |
|
Other non-current assets, net |
|
31,589 |
Total assets |
$ |
602,518 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
5,013 |
|
Current portion of long-term debt |
|
19,703 |
|
Accrued liabilities |
|
7,928 |
|
Current lease liabilities |
|
15,357 |
|
Interest payable due to affiliates |
|
156,015 |
|
Other current liabilities |
|
5,298 |
|
Total current liabilities |
|
209,314 |
|
|
|
|
|
Long-term debt |
|
198,393 |
|
Loans due to affiliates |
|
55,589 |
|
Non-current lease liabilities |
|
104,041 |
|
Deferred tax liabilities, net |
|
25,111 |
|
Other long-term liabilities |
|
5,389 |
Total liabilities |
$ |
597,837 |
|
|
|
|
|
Equity |
|
|
|
|
Net parent investment |
|
4,681 |
Total equity |
|
4,681 |
|
Total liabilities and equity |
$ |
602,518 |
|
F-2
NFE Jamaica
(A Business of New Fortress Energy Inc.)
Condensed Combined Statement of Operations
For the three months ended March 31, 2025
(in thousands of U.S. dollars)
|
|
Three Months Ended March 31, 2025 |
|
|
|
||
Revenues |
|
|
|
Operating revenues |
$ |
94,178 |
|
Total revenues |
|
94,178 |
|
Operating expenses |
|
|
|
|
Cost of sales (exclusive of depreciation shown separately below) |
|
75,089 |
|
Operations and maintenance |
|
10,796 |
|
Selling, general and administrative |
|
7,003 |
|
Depreciation and amortization |
|
5,692 |
|
Total operating expenses |
|
98,580 |
|
Operating loss |
|
(4,402) |
Interest expense |
|
8,445 |
|
Other expenses, net |
|
43 |
|
|
Loss from continuing operations before income taxes |
|
(12,890) |
Tax provision |
|
103 |
|
|
Loss from continuing operations |
|
(12,993) |
|
Net loss |
$ |
(12,993) |
|
Net income attributable to non-controlling interest |
|
(413) |
|
Net loss attributable to NFE Jamaica |
$ |
(13,406) |
F-3
NFE Jamaica
(A Business of New Fortress Energy Inc.)
Condensed Combined Statement of Changes in Equity
For the three months ended March 31, 2025
(in thousands of U.S. dollars)
|
|
Net parent investment (deficit) |
|
Non-controlling interest |
|
Total equity |
Balances as of January 1, 2025 |
$ |
(7,616) |
$ |
(578) |
$ |
(8,194) |
Net income (loss) |
|
(13,406) |
|
413 |
|
(12,993) |
Net transfers from Parent |
|
26,690 |
|
— |
|
26,690 |
Acquisition of non-controlling interest |
|
(987) |
|
165 |
|
(822) |
Balances as of March 31, 2025 |
$ |
4,681 |
$ |
— |
$ |
4,681 |
F-4
NFE Jamaica
(A Business of New Fortress Energy Inc.)
Condensed Combined Statement of Cash Flows
For the three months ended March 31, 2025
(in thousands of U.S. dollars)
|
|
Three Months Ended March 31, 2025 |
Cash flows from operating activities |
|
|
Net loss |
$ |
(12,993) |
Adjustments for: |
|
|
Amortization of deferred financing costs |
|
225 |
Depreciation and amortization |
|
5,692 |
Movement in credit loss allowances |
|
230 |
Deferred taxes |
|
(283) |
Share-based compensation |
|
(1,123) |
Unrealized losses due to foreign currency, net |
|
(77) |
Other |
|
(1,657) |
Changes in operating assets and liabilities: |
|
|
Increase in receivables |
|
(1,697) |
Increase in inventories |
|
(25,540) |
Increase in prepayments/other assets |
|
(1,582) |
Decrease in right-of-use assets |
|
4,413 |
Increase in accounts payable |
|
819 |
Increase in accrued liabilities |
|
869 |
Decrease in lease liabilities |
|
(4,807) |
Increase in interest payable due to affiliates |
|
4,663 |
Increase in other liabilities |
|
5,760 |
Net cash used in operating activities |
$ |
(27,088) |
|
|
|
Cash flows from investing activities |
|
|
Capital expenditures |
|
(519) |
Net cash used in investing activities |
$ |
(519) |
|
|
|
Cash flows from financing activities |
|
|
Proceeds from loans due to affiliates |
|
747 |
Principal payments on finance lease liabilities |
|
(23) |
Acquisition of non-controlling interest |
|
(822) |
Net transfers from Parent |
|
27,813 |
Net cash provided by financing activities |
$ |
27,715 |
|
|
|
Net increase in cash, cash equivalents and restricted cash |
|
108 |
Cash, cash equivalents and restricted cash – beginning of period |
|
9,086 |
Cash, cash equivalents and restricted cash – end of period |
$ |
9,194 |
|
|
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
Changes in accounts payable and accrued liabilities associated with construction in progress additions |
$ |
(216) |
F-5
The following table identifies the balance sheet line-items included in Cash and cash equivalents and Restricted cash presented in the Condensed Combined Statement of Cash Flows. Restricted cash consists of funds that are contractually restricted as to usage or withdrawal and have been presented separately from Cash and cash equivalents on the Condensed Combined Balance Sheet. As of March 31, 2025, Restricted cash consisted of cash restricted for performance and customs bonds.
|
|
Three Months Ended March 31, 2025 |
Cash and cash equivalents |
$ |
8,558 |
Restricted cash |
|
636 |
Cash, cash equivalents and restricted cash – end of period |
$ |
9,194 |
F-6
1. Organization
New Fortress Energy Inc. (“NFE” or “Parent”) is a global energy infrastructure company founded to help address energy poverty and accelerate the world’s transition to reliable, affordable and clean energy. NFE owns and operates natural gas and liquefied natural gas (“LNG”) infrastructure, ships and logistics assets to rapidly deliver turnkey energy solutions to global markets. NFE has liquefaction, regasification and power generation operations in the United States, Jamaica, Brazil and Mexico.
On March 27, 2025, NFE announced the execution of an agreement to sell its assets and operations in Jamaica (“NFE Jamaica” or the “Company”). The principal activities of the Company are the operation of an LNG regasification facility in Montego Bay, operation of an offshore LNG regasification and storage facility in Old Harbour, operation of dual-fired combined heat and power facility in Clarendon and sale of LNG and natural gas to industrial end-user customers in Jamaica.
2. Basis of presentation
The accompanying unaudited interim Condensed Combined Financial Statements present, on a historical basis, the results of operations, financial position, and cash flows of the Company. The Condensed Combined Financial Statements have been prepared from the Parent’s historical accounting records and presented as if the Company had operated on a standalone basis throughout the periods presented. Historically, separate financial statements have not been prepared for the Company, and it has not operated as a stand-alone business from the Parent. The Condensed Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all normal and recurring adjustments which are, in the opinion of management, necessary to provide a fair statement of financial position, results of operations, and cash flows of the Company. These Condensed Combined Financial Statements and accompanying notes should be read in conjunction with the Company’s audited Combined Financial Statements for the year ended December 31, 2024.
3. Revenue recognition
Operating revenue in the Condensed Combined Statement of Operations includes revenue from sales of LNG and natural gas, as well as outputs from the Company’s natural gas-fueled power generation facilities, including power and steam.
Under most customer contracts, invoicing occurs once the Company’s performance obligations have been satisfied, at which point payment is unconditional. Receivables are contractual rights to receive cash on a fixed or determinable date and are carried at amortized cost. Receivables are recognized on the Condensed Combined Balance Sheet as the amount invoiced to the customer, net of an allowance for current expected credit losses. As of March 31, 2025, all receivables were related to revenue from contracts with customers totaling $87,106, and were included in Receivables, net of allowances on the Condensed Combined Balance Sheet. This balance is net of current expected credit losses of $2,972. Amounts are written off against the allowance when management is certain that outstanding amounts will not be collected. For the three months ending March 31, 2025, there were no receivables written off.
Receivables outstanding as of December 31, 2022 due from Jamalco, a bauxite mining and alumina producer in Jamaica, under the terms of the gas sales agreement (“GSA”) were recognized in the ordinary course of business. As of March 31, 2025, $30,928 of these receivables remains outstanding. Receivables outstanding are contractually due and payable by Jamalco, and the Company is actively pursuing the collection of these receivables. While the Company believes these receivables are collectible, based on the length of time these receivables have been outstanding, there is a risk that the full amount of these receivables will not be recovered, and this amount could be material to these Condensed Combined Financial Statements.
F-7
The Company estimates expected credit losses based on relevant information about the current credit quality of customers, past events, including historical experience, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit loss expense, inclusive of credit loss expense on all categories of financial assets, is recorded within Selling, general and administrative in the Condensed Combined Statement of Operations. The Company believes the carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximated their fair value as of March 31, 2025 and are classified as Level 1 within the fair value hierarchy.
|
|
Allowance for Current Expected Credit Losses |
Balance as of January 1, 2025 |
$ |
2,900 |
Net change in allowance |
|
72 |
Balance as of March 31, 2025 |
$ |
2,972 |
Contract assets are comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent periods. Contract liabilities reflect unconditional payments due or paid under the contracts with customers prior to the Company’s satisfaction of the related performance obligations. The contract assets and contract liabilities balances as of March 31, 2025 are detailed below:
|
|
March 31, 2025 |
Contract assets – current |
$ |
361 |
Contract assets, net – non-current |
|
4,979 |
Total contract assets, net |
$ |
5,340 |
|
|
|
Contract liabilities– current |
$ |
4,449 |
Contract liabilities– non-current |
|
— |
Total contract liabilities, net |
$ |
4,449 |
|
|
|
Revenue recognized in the period from: |
|
|
Amounts included in contract liabilities at the beginning of the period |
$ |
356 |
No material credit losses are expected for contract assets as of March 31, 2025.
The Company has recognized costs to fulfill contracts with customers, which primarily consist of expenses required to enhance resources to deliver under agreements with these customers. These costs can include set-up and mobilization costs incurred ahead of the service period, and such costs will be recognized on a straight-line basis over the expected term of the agreement. As of March 31, 2025, the Company has capitalized $9,006, of which $604 of these costs is presented within Prepaid expenses and other current assets, and $8,402 is presented within Other non-current assets, net on the Condensed Combined Balance Sheet.
Transaction price allocated to remaining performance obligations
Some of the Company’s contracts are short-term in nature with a contract term of less than a year. The Company applied the optional exemption not to report any unfulfilled performance obligations related to these contracts.
F-8
The Company has arrangements in which LNG, natural gas or outputs from the Company’s power generation facilities are sold on a “take-or-pay” basis whereby the customer is obligated to pay for the minimum guaranteed volumes even if it does not take delivery. The price under these agreements is typically based on a market index plus a fixed margin. The fixed transaction price allocated to the remaining performance obligations under these arrangements represents the fixed margin multiplied by the outstanding minimum guaranteed volumes. The Company expects to recognize this revenue over the following time periods. The pattern of recognition reflects the minimum guaranteed volumes in each period:
Period |
|
Revenue |
Remainder of 2025 |
$ |
196,028 |
2026 |
|
260,337 |
2027 |
|
258,693 |
2028 |
|
253,554 |
2029 |
|
249,657 |
Thereafter |
|
2,302,296 |
Total |
$ |
3,520,565 |
For all sales contracts that have a term exceeding one year, the Company has elected the practical expedient in ASC 606 under which the Company does not disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. For these excluded contracts, the sources of variability are (a) the market index prices of natural gas used to price the contracts, and (b) the variation in volumes that may be delivered to the customer. Both sources of variability are expected to be resolved at or shortly before delivery of each unit of LNG, natural gas, or power. As each unit of LNG, natural gas, or power represents a separate performance obligation, future volumes are wholly unsatisfied.
Customer concentrations
For the three months ended March 31, 2025, revenue from two significant customers constituted 63% of total revenue, respectively. No other customer comprised of more than 10% of the Company’s revenues.
For the three months ended March 31, 2025, revenue from external customers were entirely derived from customers located in Jamaica. As of March 31, 2025, all of the Company’s long-lived assets were located in Jamaica.
4. Leases, as lessee
The Company has operating leases primarily for the use of vessels, marine port space, office space, land, and equipment under non-cancellable lease agreements. The Company’s leases may include multiple optional renewal periods that are exercisable solely at the Company’s discretion. Renewal periods are included in the lease term when the Company is reasonably certain that renewal options would be exercised, and the associated lease payments are reflected in the ROU asset and lease liability.
The Company’s leases include fixed lease payments which may include escalation terms based on a fixed percentage or may vary based on an inflation index or other market adjustments. Escalation resulting from changes in inflation indices and market adjustments, as well as other lease costs that depend on the use of the underlying asset, are not considered lease payments when calculating the lease liability or ROU asset. Instead, such payments are accounted for as variable lease cost when the condition that triggers the variable payment becomes probable. The Company also has a component of lease payments that are variable related to the LNG vessels, in which the Company may receive credits based on the performance of the LNG vessels during the period.
F-9
Right-of-use assets, Current lease liabilities, and Non-current lease liabilities as of March 31, 2025 were as follows:
|
|
March 31, 2025 |
Operating right-of-use-assets |
$ |
118,438 |
Finance right-of-use-assets (1) |
|
390 |
Total Right-of-use assets |
$ |
118,828 |
|
|
|
Current lease liabilities: |
|
|
Operating lease liabilities |
$ |
15,678 |
Finance lease liabilities |
|
(321) |
Total Current lease liabilities |
$ |
15,357 |
Non-current lease liabilities: |
|
|
Operating lease liabilities |
|
103,999 |
Finance lease liabilities |
|
42 |
Total Non-current lease liabilities |
$ |
104,041 |
(1) Finance lease ROU assets are recorded net of accumulated amortization of $121 as of March 31, 2025.
For the three months ended March 31, 2025, the Company’s operating lease cost recorded within the Condensed Combined Statement of Operations was as follows:
|
|
Three Months Ended March 31, 2025 |
Fixed lease cost |
$ |
7,163 |
Variable lease cost |
|
49 |
Short-term lease cost |
|
7 |
|
|
|
Lease cost - Cost of sales |
$ |
6,755 |
Lease cost - Operations and maintenance |
|
231 |
Lease cost - Selling, general and administrative |
|
233 |
Cash paid for operating leases is reported in operating activities in the Condensed Combined Statement of Cash Flows. Supplemental cash flow information related to leases was as follows for the three months ended March 31, 2025:
|
|
Three Months Ended March 31, 2025 |
Operating cash outflows for operating lease liabilities |
$ |
6,795 |
Financing cash outflows for finance lease liabilities |
$ |
23 |
F-10
The future payments due under operating leases as of March 31, 2025, are as follows:
|
|
Operating Leases |
Due remainder of 2025 |
$ |
17,713 |
2026 |
|
22,396 |
2027 |
|
22,407 |
2028 |
|
22,479 |
2029 |
|
22,431 |
Thereafter |
|
46,807 |
Total lease payments |
$ |
154,233 |
Less: effects of discontinuing |
|
34,835 |
Present value of lease liabilities |
$ |
119,398 |
|
|
|
Current lease liabilities |
$ |
15,357 |
Non-current lease liabilities |
|
104,041 |
As of March 31, 2025, the weighted-average remaining lease term for operating leases was 6.9 years and finance leases was 1.5 years. Because the Company generally does not have access to the rate implicit in the lease, the incremental borrowing rate is utilized as the discount rate. The weighted average discount rate associated with operating leases and finance leases as of March 31, 2025 was 8.1% and 5.0%, respectively.
5. Inventory
As of March 31, 2025, Inventory consisted of the following:
|
|
March 31, 2025 |
LNG and natural gas inventory |
$ |
31,540 |
Automotive diesel oil inventory |
|
6,919 |
Bunker fuel, materials, supplies and other |
|
2,073 |
Total Inventory |
$ |
40,532 |
Inventory is adjusted to the lower of cost or net realizable value. Changes in the value of inventory are recorded within Cost of sales in the Condensed Combined Statement of Operations.
6. Prepaid expenses and other current assets
As of March 31, 2025, Prepaid expenses and other current assets were as follows:
|
|
March 31, 2025 |
Prepaid expenses |
$ |
1,470 |
Recoverable taxes |
|
1,914 |
Other current assets |
|
3,922 |
Total Prepaid expenses and other current assets |
$ |
7,306 |
Other current assets consists of finance lease assets, contract assets, costs to fulfill, and deposits.
F-11
7. Property, plant and equipment, net
As of March 31, 2025, the Company’s Property, plant and equipment, net was as follows:
|
|
March 31, 2025 |
Gas pipelines |
$ |
66,319 |
Terminals |
|
232,519 |
Power facilities |
|
124,897 |
Construction in progress |
|
1,714 |
Other equipment |
|
23,857 |
Gross property, plant and equipment |
|
449,306 |
Accumulated depreciation |
|
(141,994) |
Total Property, plant and equipment, net |
$ |
307,312 |
Depreciation expense for the three months ended March 31, 2025 totaled $5,676.
8. Other non-current assets, net
As of March 31, 2025, Other non-current assets, net consisted of the following:
|
|
March 31, 2025 |
Contract assets, net (Note 3) |
$ |
5,340 |
Costs to fulfill (Note 3) |
|
9,006 |
Other assets |
|
17,243 |
Total Other non-current assets, net |
$ |
31,589 |
9. Accrued liabilities
As of March 31, 2025, Accrued liabilities were as follows:
|
|
March 31, 2025 |
Accrued bonuses |
$ |
370 |
Accrued interest |
|
1,331 |
Other accrued expenses |
|
6,227 |
Total Accrued liabilities |
$ |
7,928 |
10. Other current liabilities
As of March 31, 2025, Other current liabilities were as follows:
|
|
March 31, 2025 |
Income tax payable |
$ |
941 |
Contract liabilities (Note 3) |
|
4,449 |
Other current liabilities |
|
(92) |
Total Other current liabilities |
$ |
5,298 |
F-12
11. Debt
As of March 31, 2025, Long-term debt consisted of the following:
|
|
March 31, 2025 |
South Power 2029 Bonds |
$ |
218,096 |
Total debt |
$ |
218,096 |
Total Current portion of long-term debt |
$ |
19,703 |
Total Long-term debt |
|
198,393 |
Long-term debt is recorded at amortized cost on the Condensed Combined Balance Sheet. The fair value of the Company’s long-term debt is $224,819 as of March 31, 2025. The Company utilizes a discounted cash flow approach with Level 2 inputs within the fair value hierarchy to calculate the fair value.
Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. Level 1 includes observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2 includes inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs.
Interest Expense
Interest expense recognized for the three months ended March 31, 2025 consisted of the following:
|
|
March 31, 2025 |
Interest on debt |
$ |
3,557 |
Interest on loans due to affiliates |
|
4,663 |
Amortization of debt issuance costs and discounts |
|
225 |
Total Interest expense |
$ |
8,445 |
12. Income taxes
The effective tax rate for the three months ended March 31, 2025 was (0.7)% . The total tax provision for the three months ended March 31, 2025 was $103. The Company's effective tax rate for the three months ended March 31, 2025 is lower than the Company's statutory tax rate principally due to valuation allowances recorded against deferred tax assets that are not more likely than not to be realized.
13. Commitments and contingencies
The Company is subject to certain tax, legal and regulatory proceedings, claims and disputes that arise in the ordinary course of business. The Company does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.
14. Related party transactions
The Company has not historically operated as a stand-alone business and the Condensed Combined Financial Statements are derived from the consolidated financial statements and accounting records of the Parent. The following disclosure summarizes activity between the Company and the Parent.
Allocation of Parent corporate expenses
The Condensed Combined Statement of Operations and Condensed Combined Statement of Cash Flows include an allocation of costs for certain services provided by the Parent to the Company, such as human resources, finance, tax, accounting, legal, regulatory and compliance, information technology, and marketing. The cost of these services was allocated to the Company based on the proportion of revenue and headcount. The allocation amounted to $5,832 for the three months ended March 31, 2025.
F-13
The Condensed Combined Financial Statements do not necessarily include all of the expenses that would have been incurred by the Company had it been an independent, stand-alone company. It is not practicable to estimate actual costs that would have been incurred had the Company been an independent, stand-alone company during the periods presented. Management considers these allocations to be a reasonable reflection of the Company’s utilization of services or the benefit received.
DevTech investment
In 2018, the Company entered into a consulting arrangement with DevTech Environment Limited (“DevTech”) to provide business development services to increase the customer base of the Company. DevTech also contributed cash consideration in exchange for a 10% interest in a consolidated subsidiary. The 10% interest was reflected as non-controlling interest in the Company’s Condensed Combined Financial Statements.
In March 2025, the Company entered into an agreement to acquire DevTech's 10% non-controlling interest, and concurrently, terminated the consulting arrangement. A cash payment of $950 was made to DevTech, of which $822 was allocated to the value of the acquired shares of the subsidiary. The Company recognized approximately $128 in expense related to the consulting arrangement within Selling, general and administrative for the three months ended March 31, 2025.
Loans due to affiliates
As of March 31, 2025, the Company had loans from the Parent of $55,589 with maturities ranging from 2041 to 2043 and an interest rate of 9.0%. Interest expense on loans due to affiliates for the three months ended March 31, 2025 was $4,663. The Interest payable due to affiliates is due within one year.
The associated interest expense payable outstanding is presented as current, as the terms of the shareholder loan agreements detail that interest expense is due within one year. However, the Parent has provided a letter stating payments of current and future interest due will not be required, and none are contemplated to support the Parent’s liquidity, within one year of the date these Condensed Combined Financial Statements are available to be issued.
Net parent investment (deficit)
Net parent investment (deficit) in the Condensed Combined Balance Sheet and Condensed Combined Statement of Changes in Equity represents the Parent’s historical investment in the Company, the net effect of transactions with, and allocations from, the Parent, and the Company’s accumulated losses. Net transfers from Parent are included within Net parent investment in the Condensed Combined Balance Sheet.
The components of the Net transfers from Parent were as follows:
|
|
Three Months Ended March 31, 2025 |
Financing activities (cash inflow) |
$ |
20,858 |
Costs allocated from Parent centralized shared corporate functions (cash inflow) |
|
5,832 |
Net transfers from Parent as reflected in the Condensed Combined Statement of Changes in Equity |
|
26,690 |
Share-based compensation (non-cash activity) |
|
1,123 |
Net transfers from Parent as reflected in the Condensed Combined Statement of Cash Flows |
$ |
27,813 |
F-14
Transactions with Parent:
During the normal course of operations, the Company routinely purchases LNG from the Parent. During the three months ended March 31, 2025, the Company purchased LNG, totaling $68,562, which is recognized within Cost of sales in the Condensed Combined Statement of Operations.
Lease Agreement
Beginning in 2021, the Company incurred costs arising from the lease of the Hoegh Gallant (“Gallant”) vessel, which was leased from NFE International Shipping LLC. The Gallant is the primary asset that performs the storage and regasification activities at the offshore facility at Old Harbour, Jamaica. The Company recognized $5,473 of lease expense related to the Gallant for the three months ended March 31, 2025. The operating Right-of-use asset, net and Lease liability were $113,278 and $113,264 as of March 31, 2025.
15. Subsequent events
On March 26, 2025, the Parent entered into an equity and asset purchase agreement to sell NFE Jamaica for cash consideration of approximately $1.1 billion, subject to certain purchase price adjustments.
On May 5, 2025, the Company provided a notice of repurchase of the 2029 South Power Bonds and related syndicated loan facility, a $30 million debt being prepaid simultaneously with the bonds. The Company will repurchase the 2029 South Power at 101% of the outstanding principal amount plus accrued and unpaid interest. The repurchase will be completed concurrently with the closing of the sale of NFE Jamaica, and the Parent will utilize proceeds received from the sale of NFE Jamaica to complete the repurchase.
The Company has evaluated subsequent events through May 13, 2025, the date on which the Condensed Combined Financial Statements were issued.
F-15
EXHIBIT 99.3
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
On May 14, 2025, Excelerate Energy Limited Partnership (“EELP”), a subsidiary of Excelerate Energy, Inc. (the “Company” or “Excelerate”), completed the transactions contemplated by the Equity and Asset Purchase Agreement, dated as of March 26, 2025 (the “Purchase Agreement”), by and among Atlantic Energy Holdings LLC (“Seller”), New Fortress Energy Inc. (“NFE” and, together with Seller, the “NFE Parties”) and EELP. Pursuant to the Purchase Agreement, EELP acquired the NFE Parties’ business in Jamaica (the “Jamaica Business”) from the NFE Parties (the “Acquisition”) for an aggregate initial purchase price of $1.055 billion, in cash, subject to certain adjustments for cash, indebtedness, transaction expenses, working capital and liquefied natural gas and fuel inventory.
Under the terms of the agreement, Excelerate acquired the assets and operations of the Montego Bay LNG Terminal, the Old Harbour LNG Terminal, and the Clarendon combined heat and power co-generation plant (“CCHP”). Excelerate also entered into two new operating leases to service the facilities and provide regasification services.
On March 31, 2025, the Company and EELP entered into an underwriting agreement (the “Underwriting Agreement”) relating to an underwritten public offering (the “Equity Offering”) of 6,956,522 shares (the “Firm Shares”) of the Company’s Class A Common Stock. The offering price of the Firm Shares to the public was $26.50 per share, and the underwriters agreed to purchase the Firm Shares from the Company pursuant to the Underwriting Agreement at a price of $25.308 per share. Under the terms of the Underwriting Agreement, the Company granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 1,043,478 shares (together with the Firm Shares, the “Shares”) of the Company’s Class A Common Stock at the same price per share as the Firm Shares. The Equity Offering closed on April 2, 2025. The underwriters’ option was fully exercised and subsequently closed on May 1, 2025. The net proceeds from the Equity Offering to the Company from the sale of the Shares, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $201.8 million.
On May 5, 2025, EELP closed on an offering (the “Debt Offering”) of $800 million in aggregate principal amount of 8.000% unsecured senior notes due 2030 (the “2030 Notes”). The 2030 Notes were issued pursuant to an Indenture, dated as of May 5, 2025, by and among EELP, the Guarantors a party thereto and U.S. Bank Trust Company, National Association, as trustee, paying agent and registrar (the “Indenture”), will mature on May 15, 2030 and were issued at par. As a result of the Debt Offering and Equity Offering, the amount available under the previously announced senior secured bridge term loan facility was reduced to zero.
Collectively, the Acquisition, the Equity Offering and the Debt Offering are referred to as the “Transactions.” Excelerate used the net proceeds from the Equity Offering and Debt Offering, along with cash on hand to (i) fund the consideration paid by the Company in the Acquisition of the Jamaica Business, (ii) repay the outstanding borrowings under the Company’s term loan facility, and (iii) pay related fees and expenses for the Equity Offering and the Debt Offering.
Excelerate and the NFE Parties prepared their respective historical financial statements in accordance with U.S. GAAP. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), Excelerate was treated as the acquirer for accounting purposes and accounted for the Acquisition as an acquisition of a business.
The unaudited pro forma combined balance sheet at March 31, 2025 was prepared as if the Transactions had occurred on March 31, 2025; the unaudited pro forma combined statements of income for the three months ended March 31, 2025 and for the year ended December 31, 2024 were prepared as if the Transactions had occurred on January 1, 2024. The unaudited pro forma combined financial statements have been derived from the historical consolidated financial statements of the Company and the Jamaica Business.
The unaudited pro forma combined financial statements and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by the Company’s management. Accordingly, actual results could differ materially from the pro forma information. Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma combined financial statements are described in the accompanying notes. Significant estimates and assumptions include, but are not limited to, the preliminary purchase price allocation, based upon estimates of fair value of the assets and liabilities of the Jamaica Business as of March 31, 2025. Management believes that the assumptions used to prepare the unaudited pro forma combined financial statements and accompanying notes provide a reasonable and supportable basis for presenting the significant estimated effects of the Transactions. However, the estimates and assumptions are subject to change as additional information becomes available. The following unaudited pro forma combined statements of income do not purport to represent what the Company’s results of operations would have been if the Transactions had occurred on January 1, 2024. The unaudited pro forma combined balance sheet does not purport to represent what the Company’s financial position would have been if the Transactions had occurred on March 31, 2025. For purposes of the unaudited pro forma combined financial statements, the adjustments related to the Equity Offering and the Debt Offering to effectuate the Transactions are shown in a separate column as “Financing Adjustments.”
The unaudited pro forma combined financial statements should be read together with the following:
The unaudited pro forma combined financial statements have been prepared in accordance with Article 11 of SEC Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses,” using assumptions set forth in the notes herein. Article 11 permits presentation of reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). The Company has elected to present Management’s Adjustments in the unaudited pro forma combined financial statements.
Excelerate Energy, Inc.
Pro Forma Combined Balance Sheet (Unaudited)
As of March 31, 2025
(In thousands)
|
Excelerate |
|
|
Jamaica Business As Adjusted |
|
|
Transaction Accounting Adjustments |
|
|
Financing Adjustments |
|
|
Pro Forma |
|
|||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
$ |
619,469 |
|
|
$ |
8,558 |
|
|
$ |
(1,069,930 |
) |
(a) |
$ |
627,604 |
|
(a) |
$ |
387,498 |
|
|
|
|
|
|
|
|
|
|
|
|
201,797 |
|
(b) |
|
|
||||
Current portion of restricted cash |
|
3,554 |
|
|
|
636 |
|
|
|
— |
|
|
|
— |
|
|
|
4,190 |
|
Accounts receivable, net |
|
85,679 |
|
|
|
87,106 |
|
|
|
(48,583 |
) |
(a) |
|
— |
|
|
|
124,202 |
|
Current portion of net investments in sales-type leases |
|
44,393 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44,393 |
|
Inventories |
|
1,089 |
|
|
|
40,532 |
|
|
|
(14,223 |
) |
(a) |
|
— |
|
|
|
27,398 |
|
Other current assets |
|
25,635 |
|
|
|
7,306 |
|
|
|
(870 |
) |
(a) |
|
(850 |
) |
(a) |
|
30,621 |
|
|
|
|
|
|
|
|
|
|
|
|
(600 |
) |
(b) |
|
|
||||
Total current assets |
|
779,819 |
|
|
|
144,138 |
|
|
|
(1,133,606 |
) |
|
|
827,951 |
|
|
|
618,302 |
|
Restricted cash |
|
14,582 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,582 |
|
Property and equipment, net |
|
1,627,715 |
|
|
|
307,935 |
|
|
|
117,217 |
|
(a) |
|
— |
|
|
|
2,052,867 |
|
Right-of-use assets |
|
26,491 |
|
|
|
118,828 |
|
|
|
54,696 |
|
(a) |
|
— |
|
|
|
200,015 |
|
Net investments in sales-type leases |
|
365,507 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
365,507 |
|
Investments in equity method investee |
|
19,425 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,425 |
|
Intangible assets, net |
|
— |
|
|
|
— |
|
|
|
380,000 |
|
(a) |
|
— |
|
|
|
380,000 |
|
Goodwill |
|
— |
|
|
|
— |
|
|
|
253,383 |
|
(a) |
|
— |
|
|
|
253,383 |
|
Deferred tax assets, net |
|
26,997 |
|
|
|
651 |
|
|
|
(651 |
) |
(a) |
|
— |
|
|
|
26,997 |
|
Other assets |
|
56,907 |
|
|
|
30,966 |
|
|
|
(12,352 |
) |
(a) |
|
— |
|
|
|
75,521 |
|
Total assets |
$ |
2,917,443 |
|
|
$ |
602,518 |
|
|
$ |
(341,313 |
) |
|
$ |
827,951 |
|
|
$ |
4,006,599 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable |
$ |
48,267 |
|
|
$ |
4,071 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
52,338 |
|
Accrued liabilities and other liabilities |
|
74,364 |
|
|
|
27,880 |
|
|
|
7,062 |
|
(a) |
|
(850 |
) |
(a) |
|
139,115 |
|
|
|
|
|
|
|
|
|
29,419 |
|
(b) |
|
(600 |
) |
(b) |
|
|
|||
|
|
|
|
|
|
|
|
1,840 |
|
(c) |
|
|
|
|
|
||||
Current portion of deferred revenues |
|
30,667 |
|
|
|
1,645 |
|
|
|
— |
|
|
|
— |
|
|
|
32,312 |
|
Current portion of long-term debt |
|
46,993 |
|
|
|
19,703 |
|
|
|
(19,703 |
) |
(a) |
|
(24,247 |
) |
(a) |
|
22,746 |
|
Current portion of long-term debt – related party |
|
9,140 |
|
|
|
156,015 |
|
|
|
(156,015 |
) |
(a) |
|
— |
|
|
|
9,140 |
|
Current portion of finance lease liabilities |
|
23,841 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
23,841 |
|
Total current liabilities |
|
233,272 |
|
|
|
209,314 |
|
|
|
(137,397 |
) |
|
|
(25,697 |
) |
|
|
279,492 |
|
Long-term debt, net |
|
275,638 |
|
|
|
198,393 |
|
|
|
(198,393 |
) |
(a) |
|
653,231 |
|
(a) |
|
928,869 |
|
Long-term debt, net – related party |
|
159,433 |
|
|
|
55,589 |
|
|
|
(55,589 |
) |
(a) |
|
— |
|
|
|
159,433 |
|
Operating lease liabilities |
|
3,425 |
|
|
|
103,999 |
|
|
|
45,393 |
|
(a) |
|
— |
|
|
|
152,817 |
|
Finance lease liabilities |
|
162,233 |
|
|
|
42 |
|
|
|
— |
|
|
|
— |
|
|
|
162,275 |
|
TRA liability |
|
58,955 |
|
|
|
— |
|
|
|
(1,840 |
) |
(c) |
|
— |
|
|
|
57,115 |
|
Asset retirement obligations |
|
44,166 |
|
|
|
5,389 |
|
|
|
— |
|
|
|
— |
|
|
|
49,555 |
|
Long-term deferred revenues |
|
27,564 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27,564 |
|
Other long-term liabilities |
|
21,052 |
|
|
|
25,111 |
|
|
|
40,613 |
|
(a) |
|
— |
|
|
|
86,776 |
|
Total liabilities |
$ |
985,738 |
|
|
$ |
597,837 |
|
|
$ |
(307,213 |
) |
|
$ |
627,534 |
|
|
$ |
1,903,896 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Class A common stock |
|
27 |
|
|
|
— |
|
|
|
— |
|
|
|
8 |
|
(b) |
|
35 |
|
Class B common stock |
|
82 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
82 |
|
Additional paid-in capital |
|
471,457 |
|
|
|
4,681 |
|
|
|
(4,681 |
) |
(a) |
|
201,789 |
|
(b) |
|
611,905 |
|
|
|
|
|
|
|
|
|
(21,163 |
) |
(d) |
|
(40,178 |
) |
(c) |
|
|
|||
Retained earnings |
|
82,174 |
|
|
|
— |
|
|
|
(29,419 |
) |
(b) |
|
(1,380 |
) |
(a) |
|
51,375 |
|
Accumulated other comprehensive income |
|
90 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
90 |
|
Treasury stock |
|
(54,628 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(54,628 |
) |
Non-controlling interests |
|
1,432,503 |
|
|
|
— |
|
|
|
21,163 |
|
(d) |
|
40,178 |
|
(c) |
|
1,493,844 |
|
Total equity |
|
1,931,705 |
|
|
|
4,681 |
|
|
|
(34,100 |
) |
|
|
200,417 |
|
|
|
2,102,703 |
|
Total liabilities and equity |
$ |
2,917,443 |
|
|
$ |
602,518 |
|
|
$ |
(341,313 |
) |
|
$ |
827,951 |
|
|
$ |
4,006,599 |
|
The accompanying notes are an integral part of these unaudited pro forma combined financial statements.
Excelerate Energy, Inc.
Pro Forma Combined Statement of Income (Unaudited)
Three Months Ended March 31, 2025
(In thousands, except share and per share amounts)
|
Excelerate As Reported |
|
|
Jamaica Business As Adjusted |
|
|
Transaction Accounting Adjustments |
|
|
Financing Adjustments |
|
|
Pro Forma |
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
FSRU and terminal services |
$ |
148,365 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
148,365 |
|
Gas sales |
|
166,725 |
|
|
|
94,178 |
|
|
|
5,106 |
|
(a) |
|
— |
|
|
|
266,009 |
|
Total revenues |
|
315,090 |
|
|
|
94,178 |
|
|
|
5,106 |
|
|
|
— |
|
|
|
414,374 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of revenue and vessel operating expenses (exclusive of items below) |
|
41,938 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
41,938 |
|
Direct cost of gas sales |
|
160,759 |
|
|
|
86,237 |
|
|
|
5,106 |
|
(a) |
|
— |
|
|
|
231,489 |
|
|
|
|
|
|
|
|
|
866 |
|
(b) |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
(21,479 |
) |
(c) |
|
|
|
|
|
||||
Depreciation and amortization |
|
21,643 |
|
|
|
5,684 |
|
|
|
(1,141 |
) |
(d) |
|
— |
|
|
|
30,299 |
|
|
|
|
|
|
|
|
|
4,113 |
|
(e) |
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
21,352 |
|
|
|
6,584 |
|
|
|
— |
|
|
|
— |
|
|
|
27,936 |
|
Transition and transaction expenses |
|
3,682 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,682 |
|
Total operating expenses |
|
249,374 |
|
|
|
98,505 |
|
|
|
(12,535 |
) |
|
|
— |
|
|
|
335,344 |
|
Operating income (loss) |
|
65,716 |
|
|
|
(4,327 |
) |
|
|
17,641 |
|
|
|
— |
|
|
|
79,030 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense |
|
(11,058 |
) |
|
|
(8,520 |
) |
|
|
8,444 |
|
(f) |
|
(13,757 |
) |
(a) |
|
(24,891 |
) |
Interest expense – related party |
|
(3,258 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,258 |
) |
Earnings from equity method investment |
|
596 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
596 |
|
Other income (loss), net |
|
6,154 |
|
|
|
(43 |
) |
|
|
— |
|
|
|
— |
|
|
|
6,111 |
|
Income (loss) before income taxes |
|
58,150 |
|
|
|
(12,890 |
) |
|
|
26,085 |
|
|
|
(13,757 |
) |
|
|
57,588 |
|
Provision for income taxes |
|
(6,027 |
) |
|
|
(103 |
) |
|
|
(2,812 |
) |
(g) |
|
1,426 |
|
(b) |
|
(7,516 |
) |
Net income (loss) |
|
52,123 |
|
|
|
(12,993 |
) |
|
|
23,273 |
|
|
|
(12,331 |
) |
|
|
50,072 |
|
Less net income attributable to non-controlling interests |
|
40,736 |
|
|
|
413 |
|
|
|
9,398 |
|
(h) |
|
(9,903 |
) |
(c) |
|
40,231 |
|
|
|
|
|
|
|
|
|
(413 |
) |
(i) |
|
|
|
|
|
||||
Net income (loss) attributable to shareholders |
$ |
11,387 |
|
|
$ |
(13,406 |
) |
|
$ |
14,288 |
|
|
$ |
(2,428 |
) |
|
$ |
9,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income per common share – basic (Note 7) |
$ |
0.48 |
|
|
|
|
|
|
|
|
|
|
|
$ |
0.31 |
|
|||
Net income per common share – diluted (Note 7) |
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
|
$ |
0.30 |
|
|||
Weighted average shares outstanding – basic (Note 7) |
|
23,900,116 |
|
|
|
|
|
|
|
|
|
|
|
|
31,900,116 |
|
|||
Weighted average shares outstanding – diluted (Note 7) |
|
106,751,592 |
|
|
|
|
|
|
|
|
|
|
|
|
32,730,203 |
|
|||
The accompanying notes are an integral part of these unaudited pro forma combined financial statements.
Excelerate Energy, Inc.
Pro Forma Combined Statement of Income (Unaudited)
Year Ended December 31, 2024
(In thousands, except share and per share amounts)
|
Excelerate As Reported |
|
|
Jamaica Business As Adjusted |
|
|
Transaction Accounting Adjustments |
|
|
Financing Adjustments |
|
|
Pro Forma |
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
FSRU and terminal services |
$ |
612,164 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
612,164 |
|
Gas sales |
|
239,273 |
|
|
|
357,519 |
|
|
|
19,368 |
|
(a) |
|
— |
|
|
|
616,160 |
|
Total revenues |
|
851,437 |
|
|
|
357,519 |
|
|
|
19,368 |
|
|
|
— |
|
|
|
1,228,324 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of revenue and vessel operating expenses (exclusive of items below) |
|
215,610 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
215,610 |
|
Direct cost of gas sales |
|
227,745 |
|
|
|
318,990 |
|
|
|
19,368 |
|
(a) |
|
— |
|
|
|
479,619 |
|
|
|
|
|
|
|
|
|
2,895 |
|
(b) |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
(89,379 |
) |
(c) |
|
|
|
|
|
||||
Depreciation and amortization |
|
98,939 |
|
|
|
23,115 |
|
|
|
(4,924 |
) |
(d) |
|
— |
|
|
|
133,588 |
|
|
|
|
|
|
|
|
|
16,458 |
|
(e) |
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
94,148 |
|
|
|
33,731 |
|
|
|
— |
|
|
|
— |
|
|
|
127,879 |
|
Transition and transaction expenses |
|
— |
|
|
|
— |
|
|
|
29,419 |
|
(j) |
|
— |
|
|
|
29,419 |
|
Total operating expenses |
|
636,442 |
|
|
|
375,836 |
|
|
|
(26,163 |
) |
|
|
— |
|
|
|
986,115 |
|
Operating income (loss) |
|
214,995 |
|
|
|
(18,317 |
) |
|
|
45,531 |
|
|
|
— |
|
|
|
242,209 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense |
|
(47,365 |
) |
|
|
(36,521 |
) |
|
|
35,799 |
|
(f) |
|
(53,508 |
) |
(a) |
|
(101,595 |
) |
Interest expense – related party |
|
(13,657 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(13,657 |
) |
Earnings from equity method investment |
|
2,247 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,247 |
|
Other income (loss), net |
|
22,913 |
|
|
|
(1,242 |
) |
|
|
— |
|
|
|
— |
|
|
|
21,671 |
|
Income (loss) before income taxes |
|
179,133 |
|
|
|
(56,080 |
) |
|
|
81,330 |
|
|
|
(53,508 |
) |
|
|
150,875 |
|
Provision for income taxes |
|
(26,099 |
) |
|
|
(23,198 |
) |
|
|
16,346 |
|
(g) |
|
7,796 |
|
(b) |
|
(25,155 |
) |
Net income (loss) |
|
153,034 |
|
|
|
(79,278 |
) |
|
|
97,676 |
|
|
|
(45,712 |
) |
|
|
125,720 |
|
Less net income attributable to non-controlling interest |
|
120,156 |
|
|
|
43 |
|
|
|
18,105 |
|
(h) |
|
(38,121 |
) |
(c) |
|
100,140 |
|
|
|
|
|
|
|
|
|
(43 |
) |
(i) |
|
|
|
|
|
||||
Net income (loss) attributable to shareholders |
$ |
32,878 |
|
|
$ |
(79,321 |
) |
|
$ |
79,614 |
|
|
$ |
(7,591 |
) |
|
$ |
25,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income per common share – basic (Note 7) |
$ |
1.29 |
|
|
|
|
|
|
|
|
|
|
|
$ |
0.77 |
|
|||
Net income per common share – diluted (Note 7) |
$ |
1.27 |
|
|
|
|
|
|
|
|
|
|
|
$ |
0.76 |
|
|||
Weighted average shares outstanding – basic (Note 7) |
|
25,400,181 |
|
|
|
|
|
|
|
|
|
|
|
|
33,400,181 |
|
|||
Weighted average shares outstanding – diluted (Note 7) |
|
25,844,735 |
|
|
|
|
|
|
|
|
|
|
|
|
33,844,735 |
|
|||
The accompanying notes are an integral part of these unaudited pro forma combined financial statements.
Notes to Unaudited Pro Forma Combined Financial Statements
The unaudited pro forma combined financial statements have been prepared in accordance with Article 11 of SEC Regulation S-X using assumptions set forth in the notes herein.
On May 14, 2025, the Acquisition was completed, and the Company paid approximately $1.055 billion of cash to the NFE Parties. The Acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, with Excelerate as the accounting acquirer. The Company’s allocation of the preliminary purchase price with respect to the Acquisition is based on estimates of, and assumptions related to, the fair value of the assets acquired and liabilities assumed as of the acquisition date of May 14, 2025, that were applied as if the Acquisition occurred on March 31, 2025. The acquisition method of accounting is dependent upon certain valuations and other studies that have yet to progress to a stage where there is sufficient information for a definitive measure. The Company intends to finalize the purchase price allocation as soon as practicable within the measurement period, but in no event later than one year following the closing date of the Acquisition. Accordingly, the pro forma adjustments are preliminary, have been made solely for the purpose of providing pro forma financial information and are subject to revision based on a final determination of fair value as of the closing date of the Acquisition. Differences between preliminary estimates and the final allocation of the consideration paid may have a material impact on the accompanying unaudited pro forma combined financial statements.
The unaudited pro forma combined balance sheet at March 31, 2025 was prepared as if the Transactions had occurred on March 31, 2025. The unaudited pro forma combined statements of income for the three months ended March 31, 2025 and for the year ended December 31, 2024 were prepared as if the Transactions had occurred on January 1, 2024. The unaudited pro forma combined financial statements have been derived from the historical consolidated financial statements of the Company and the Jamaica Business.
The unaudited pro forma combined financial statements and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by management; accordingly, actual results could differ materially from the pro forma information. Management believes the assumptions provide a reasonable and supportable basis for presenting the estimated significant effects of the transactions described above. These unaudited pro forma combined financial statements are provided for illustrative purposes only and may or may not provide an indication of results in the future.
Article 11 permits presentation of reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur, otherwise known as Management’s Adjustments. The Company has elected to present Management’s Adjustments in the unaudited pro forma combined financial statements in Note 8.
Certain reclassifications have been made in the historical presentation of the Jamaica Business’s financial statements to conform to Excelerate’s historical presentation. Additionally, as part of preparing these unaudited pro forma combined financial statements, Excelerate conducted a review of the Jamaica Business’s accounting policies to determine if differences in accounting policies require reclassification of the Jamaica Business’s financial statement results to conform to Excelerate’s accounting policies. Aside from the accounting policy reclassifications identified below, Excelerate is not aware of any material differences between the accounting policies of the Jamaica Business and Excelerate.
|
|
|
|
Balance Sheet |
|
|||||||||||
(In thousands) |
|
|
|
As of March 31, 2025 |
|
|||||||||||
Jamaica Business Caption |
|
Excelerate Caption |
|
Jamaica Business |
|
|
Reclassification |
|
|
Ref. |
|
Jamaica Business |
|
|||
Property, plant and equipment, net |
|
Property and equipment, net |
|
$ |
307,312 |
|
|
$ |
623 |
|
|
(i) |
|
$ |
307,935 |
|
Other non-current assets, net |
|
Other assets |
|
|
31,589 |
|
|
|
(623 |
) |
|
(i) |
|
|
30,966 |
|
Accounts payable |
|
Accounts payable |
|
|
5,013 |
|
|
|
(942 |
) |
|
(ii) |
|
|
4,071 |
|
Accrued liabilities |
|
Accrued liabilities and other liabilities |
|
|
7,928 |
|
|
|
19,952 |
|
|
(ii) |
|
|
27,880 |
|
|
|
Current portion of deferred revenues |
|
|
— |
|
|
|
1,645 |
|
|
(iii) |
|
|
1,645 |
|
Current lease liabilities |
|
|
|
|
15,357 |
|
|
|
(15,357 |
) |
|
(ii) |
|
|
— |
|
Other current liabilities |
|
|
|
|
5,298 |
|
|
|
(5,298 |
) |
|
(ii) (iii) |
|
|
— |
|
|
|
Finance lease liabilities |
|
|
— |
|
|
|
42 |
|
|
(iv) |
|
|
42 |
|
|
|
Asset retirement obligations |
|
|
— |
|
|
|
5,389 |
|
|
(v) |
|
|
5,389 |
|
Other long-term liabilities |
|
Other long-term liabilities |
|
|
5,389 |
|
|
|
19,722 |
|
|
(v) (vi) |
|
|
25,111 |
|
Non-current lease liabilities |
|
Operating lease liabilities |
|
|
104,041 |
|
|
|
(42 |
) |
|
(iv) |
|
|
103,999 |
|
Deferred tax liabilities, net |
|
|
|
|
25,111 |
|
|
|
(25,111 |
) |
|
(vi) |
|
|
— |
|
Net parent investment |
|
|
|
|
4,681 |
|
|
|
(4,681 |
) |
|
(vii) |
|
|
— |
|
|
|
Additional paid-in capital |
|
|
— |
|
|
|
4,681 |
|
|
(vii) |
|
|
4,681 |
|
|
|
|
|
Statement of Income |
|
|||||||||||
(In thousands) |
|
|
|
Three Months Ended March 31, 2025 |
|
|||||||||||
Jamaica Business Caption |
|
Excelerate Caption |
|
Jamaica Business |
|
|
Reclassification |
|
|
Ref. |
|
Jamaica Business |
|
|||
|
|
Gas sales |
|
$ |
— |
|
|
$ |
94,178 |
|
|
(i) |
|
$ |
94,178 |
|
Operating revenues |
|
|
|
|
94,178 |
|
|
|
(94,178 |
) |
|
(i) |
|
|
— |
|
Cost of sales (exclusive of depreciation and amortization shown separately below) |
|
|
|
|
75,089 |
|
|
|
(75,089 |
) |
|
(ii) |
|
|
— |
|
Operations and maintenance |
|
|
|
|
10,796 |
|
|
|
(10,796 |
) |
|
(ii) |
|
|
— |
|
|
|
Direct cost of gas sales |
|
|
— |
|
|
|
86,237 |
|
|
(ii) |
|
|
86,237 |
|
Depreciation and amortization |
|
Depreciation and amortization |
|
|
5,692 |
|
|
|
(8 |
) |
|
(ii) |
|
|
5,684 |
|
Selling, general and administrative |
|
Selling, general and administrative expenses |
|
|
7,003 |
|
|
|
(419 |
) |
|
(ii) (iii) |
|
|
6,584 |
|
Interest expense |
|
Interest expense |
|
|
8,445 |
|
|
|
(16,965 |
) |
|
(iii) |
|
|
(8,520 |
) |
Other expenses, net |
|
Other income (loss), net |
|
|
43 |
|
|
|
(86 |
) |
|
(iv) |
|
|
(43 |
) |
Tax provision |
|
Provision for income taxes |
|
|
103 |
|
|
|
(206 |
) |
|
(v) |
|
|
(103 |
) |
Net income attributable to non-controlling interest |
|
Less net income attributable to non-controlling interests |
|
|
(413 |
) |
|
|
826 |
|
|
(vi) |
|
|
413 |
|
|
|
|
|
Statement of Income |
|
|||||||||||
(In thousands) |
|
|
|
Year Ended December 31, 2024 |
|
|||||||||||
Jamaica Business Caption |
|
Excelerate Caption |
|
Jamaica Business |
|
|
Reclassification |
|
|
Ref. |
|
Jamaica Business |
|
|||
|
|
Gas sales |
|
$ |
— |
|
|
$ |
357,519 |
|
|
(i) |
|
$ |
357,519 |
|
Operating revenues |
|
|
|
|
357,519 |
|
|
|
(357,519 |
) |
|
(i) |
|
|
— |
|
Cost of sales (exclusive of depreciation and amortization shown separately below) |
|
|
|
|
282,872 |
|
|
|
(282,872 |
) |
|
(ii) |
|
|
— |
|
Operations and maintenance |
|
|
|
|
34,318 |
|
|
|
(34,318 |
) |
|
(ii) |
|
|
— |
|
|
|
Direct cost of gas sales |
|
|
— |
|
|
|
318,990 |
|
|
(ii) |
|
|
318,990 |
|
Depreciation and amortization |
|
Depreciation and amortization |
|
|
23,149 |
|
|
|
(34 |
) |
|
(ii) |
|
|
23,115 |
|
Selling, general and administrative |
|
Selling, general and administrative expenses |
|
|
36,230 |
|
|
|
(2,499 |
) |
|
(ii) (iii) (iv) |
|
|
33,731 |
|
Interest expense |
|
Interest expense |
|
|
35,825 |
|
|
|
(72,346 |
) |
|
(iii) |
|
|
(36,521 |
) |
Other expenses, net |
|
Other income (loss), net |
|
|
1,205 |
|
|
|
(2,447 |
) |
|
(iv) |
|
|
(1,242 |
) |
Tax provision |
|
Provision for income taxes |
|
|
23,198 |
|
|
|
(46,396 |
) |
|
(v) |
|
|
(23,198 |
) |
Net income attributable to non-controlling interest |
|
Less net income attributable to non-controlling interest |
|
|
(43 |
) |
|
|
86 |
|
|
(vi) |
|
|
43 |
|
The unaudited pro forma combined balance sheet as of March 31, 2025 reflects the following adjustments:
The preliminary purchase price allocation is subject to change due to several factors, including, but not limiting to, the following:
The tables below represent the pro forma March 31, 2025 preliminary value of the total consideration and its allocation to the net assets acquired:
(In thousands) |
Purchase Price Consideration |
|
|
Cash consideration |
$ |
692,721 |
|
Plus: Cash paid to the escrow agent |
|
98,635 |
|
Plus: Cash paid to settle the Jamaica Business's third-party debt |
|
225,419 |
|
Plus: Cash paid to settle transaction expenses |
|
50,904 |
|
Preliminary consideration |
$ |
1,067,679 |
|
(In thousands) |
|
|
|
Fair value of assets acquired |
Preliminary Purchase Price Allocation |
|
|
Cash and cash equivalents |
$ |
6,307 |
|
Current portion of restricted cash |
|
636 |
|
Accounts receivable, net |
|
38,523 |
|
Inventories |
|
26,309 |
|
Other current assets |
|
6,436 |
|
Property and equipment, net |
|
425,152 |
|
Right-of-use assets |
|
173,524 |
|
Intangible assets, net |
|
380,000 |
|
Goodwill |
|
253,383 |
|
Other assets |
|
18,614 |
|
Total assets acquired |
$ |
1,328,884 |
|
Fair value of liabilities assumed |
|
|
|
Accounts payable |
|
4,071 |
|
Accrued liabilities and other liabilities |
|
34,942 |
|
Current portion of deferred revenues |
|
1,645 |
|
Operating lease liabilities |
|
149,392 |
|
Finance lease liabilities |
|
42 |
|
Asset retirement obligations |
|
5,389 |
|
Other long-term liabilities |
|
65,724 |
|
Total liabilities assumed |
$ |
261,205 |
|
Net assets acquired |
$ |
1,067,679 |
|
Property and equipment, net:
The preliminary amount of property and equipment, net is primarily comprised of LNG terminals and power plants and their related equipment. These assets will depreciate on a straight-line basis over an estimated remaining life of between five and 40 years. The preliminary fair value of property and equipment, net was determined using the indirect cost approach. Under the indirect cost approach, we applied asset-specific trend information using published indexes to calculate the estimated replacement cost of assets that were identified to be reflected at historical cost. The useful lives were determined using industry standards, factoring in the ages of the individual assets.
Intangible assets, net:
Intangible assets, net consist of customer relationships which have a useful life of approximately 20 years, the period in which we expect to benefit from services provided to customers. The preliminary fair value of the intangible assets was determined based on the period over which the assets are expected to contribute directly or indirectly to our future cash flows.
The fair value of the identifiable intangible assets related to customer relationships was determined using the multi-period excess earnings method, which is a specific application of the discounted cash flow method, an income approach whereby we estimated then discounted the future cash flows of the intangible asset by adjusting overall business revenue for attrition, obsolescence, cost of revenues, operating expenses and income tax expense. Significant estimates made in arriving at expected future cash flows included our probability of contract renewal and the amount of earnings attributable to the assets. To discount the estimated future cash flows, we utilized a discount rate that was a premium to the weighted average cost of capital of the business acquired to reflect the less liquid nature of customer relationships relative to the tangible assets acquired.
Goodwill:
Goodwill is calculated as the difference between the preliminary estimate of the fair value of the consideration transferred and the preliminary estimates of the fair value assigned to the assets acquired and liabilities assumed. Goodwill is considered to have an indefinite life and will be tested for impairment at least annually, or whenever impairment indicators are present.
The unaudited pro forma consolidated statements of income for the three months ended March 31, 2025 and the year ended December 31, 2024 reflects the following adjustments:
(In thousands) |
Three Months Ended March 31, 2025 |
|
|
Year Ended December 31, 2024 |
|
||
Elimination of interest expense related to the Jamaica Business’s historical third-party debt |
$ |
3,780 |
|
|
$ |
15,365 |
|
Elimination of interest expense related to the Jamaica Business’s historical related party debt |
|
4,664 |
|
|
|
20,434 |
|
Net transaction accounting adjustments to interest expense |
$ |
8,444 |
|
|
$ |
35,799 |
|
The unaudited pro forma combined balance sheet as of March 31, 2025 reflects the following adjustments:
(In thousands) |
|
|
|
Cash received from issuance of 2030 Notes |
$ |
800,000 |
|
Cash paid for repayment of term loan facility |
|
(157,305 |
) |
Cash paid for deferred financing costs related to 2030 Notes |
|
(15,091 |
) |
Total adjustments to cash and cash equivalents |
$ |
627,604 |
|
|
|
|
|
Deferred financing costs |
|
(850 |
) |
Total adjustments to other current assets |
$ |
(850 |
) |
|
|
|
|
Deferred financing costs |
|
(850 |
) |
Total adjustments to accrued liabilities and other liabilities |
$ |
(850 |
) |
|
|
|
|
Repayment of term loan facility – current |
$ |
(25,000 |
) |
Unamortized deferred financing costs related to term loan facility – current |
|
753 |
|
Total adjustments to current portion of long-term debt |
$ |
(24,247 |
) |
|
|
|
|
Issuance of 2030 Notes |
$ |
800,000 |
|
Deferred financing costs related to 2030 Notes |
|
(15,091 |
) |
Repayment of term loan facility |
|
(132,305 |
) |
Unamortized deferred financing costs related to term loan facility |
|
627 |
|
Total adjustments to long-term debt |
$ |
653,231 |
|
|
|
|
|
Unamortized deferred financing costs related to term loan facility – current |
$ |
(753 |
) |
Unamortized deferred financing costs related to term loan facility |
|
(627 |
) |
Total adjustments to retained earnings |
$ |
(1,380 |
) |
(In thousands) |
|
|
|
Cash received from Class A Common Stock issued |
$ |
212,000 |
|
Less underwriting discounts |
|
(10,203 |
) |
Total adjustments to cash and cash equivalents |
$ |
201,797 |
|
|
|
|
|
Equity issuance expenses |
$ |
(600 |
) |
Total adjustments to other current assets |
$ |
(600 |
) |
|
|
|
|
Equity issuance expenses |
$ |
(600 |
) |
Total adjustments to accrued liabilities and other liabilities |
$ |
(600 |
) |
|
|
|
|
Class A Common Stock issued at $0.001 par value |
$ |
8 |
|
Total adjustments to Class A Common Stock |
$ |
8 |
|
|
|
|
|
Additional paid-in capital related to Equity Offering |
$ |
211,992 |
|
Adjustment to retained earnings from issuance costs |
|
(10,203 |
) |
Total adjustments to additional paid-in capital |
$ |
201,789 |
|
The unaudited pro forma combined statements of income for the three months ended March 31, 2025 and for year ended December 31, 2024 reflect the following adjustments:
(In thousands) |
Three Months Ended March 31, 2025 |
|
|
Year Ended |
|
||
Incremental interest expense related to 2030 Notes |
$ |
(16,000 |
) |
|
$ |
(64,000 |
) |
Incremental amortization expense for deferred financing costs related to 2030 Notes |
|
(755 |
) |
|
|
(3,018 |
) |
Elimination of interest expense related to term loan facility |
|
2,789 |
|
|
|
12,600 |
|
Elimination of amortization expense for deferred financing costs related to term loan facility |
|
209 |
|
|
|
910 |
|
Total adjustment to interest expense |
$ |
(13,757 |
) |
|
$ |
(53,508 |
) |
The table below represents the calculation of the weighted average shares outstanding and earnings per share included in the unaudited pro forma combined statements of income for the three months ended March 31, 2025 and the year ended December 31, 2024. As the Transactions are being reflected in the unaudited pro forma combined statements of income for the three months ended March 31, 2025 and the year ended December 31, 2024 as if they had occurred on January 1, 2024, the calculation of weighted average shares outstanding for the basic and diluted earnings per share assumes that the shares issued in the Equity Offering were outstanding for the entire period. The unaudited pro forma combined basic and diluted earnings per share calculations are based on the weighted average basic and diluted shares of Excelerate. The following table summarizes the computation of the unaudited pro forma basic and diluted net income per share:
(In thousands, except for share and per share amounts) |
Three Months Ended March 31, 2025 |
|
|
Year Ended December 31, 2024 |
|
||
Pro forma net income attributable to shareholders |
$ |
9,841 |
|
|
$ |
25,580 |
|
|
|
|
|
|
|
||
Pro forma weighted average shares outstanding |
|
|
|
|
|
||
Weighted average shares outstanding – basic |
|
23,900,116 |
|
|
|
25,400,181 |
|
Additional weighted average impact of shares issued in Equity Offering |
|
8,000,000 |
|
|
|
8,000,000 |
|
Pro forma weighted average shares outstanding – basic |
|
31,900,116 |
|
|
|
33,400,181 |
|
Issued upon assumed exercise of outstanding stock options |
|
2,893 |
|
|
|
— |
|
Dilutive effect of unvested restricted common stock |
|
372,817 |
|
|
|
191,062 |
|
Dilutive effect of unvested performance units |
|
454,377 |
|
|
|
253,492 |
|
Pro forma weighted average shares outstanding – diluted |
|
32,730,203 |
|
|
|
33,844,735 |
|
|
|
|
|
|
|
||
Pro forma net earnings attributable to shareholders – basic |
$ |
0.31 |
|
|
$ |
0.77 |
|
Pro forma net earnings attributable to shareholders – diluted |
$ |
0.30 |
|
|
$ |
0.76 |
|
|
|
|
|
|
|
||
Anti-dilutive weighted average shares |
|
|
|
|
|
||
Restricted common stock |
|
— |
|
|
|
282 |
|
Performance stock units |
|
48 |
|
|
|
9,579 |
|
Class B Common Stock |
|
82,021,389 |
|
|
|
82,021,389 |
|
The Jamaica Business’s selling, general and administrative expenses were allocated based on percentage of Seller’s revenue and these annual synergies primarily related to optimizing Excelerate’s corporate operations. Had the Acquisition been completed as of January 1, 2024, management estimates that the following selling, general and administrative expenses would not have been incurred, on a pre-tax basis:
The tax effect on the above adjustments have been calculated based on the blended federal and statutory rates of approximately 11.8% and 4.1% for three months ended March 31, 2025 and year ended December 31, 2024, respectively. Because the tax rates used for these unaudited pro forma combined consolidated financial statements are an estimate, the blended rate will likely vary from the actual effective rate in periods subsequent to the completion of the Transactions.
The following tables present the estimated effects on the unaudited pro forma condensed combined statements of income from elimination of the identified expense:
Statement of Income
Three Months Ended March 31, 2025
(In thousands, except share and per share amounts)
|
|
Pro Forma Combined Excelerate |
|
|
Management’s Adjustment |
|
|
Pro Forma Combined Excelerate As Adjusted |
|
|||
Selling, general and administrative expenses |
|
$ |
27,936 |
|
|
$ |
(5,832 |
) |
|
$ |
22,104 |
|
Income before income taxes |
|
|
57,588 |
|
|
|
5,832 |
|
|
|
63,420 |
|
Net income attributable to shareholders |
|
|
9,841 |
|
|
|
1,442 |
|
|
|
11,283 |
|
|
|
|
|
|
|
|
|
|
|
|||
Net income per common share – basic |
|
$ |
0.31 |
|
|
$ |
0.04 |
|
|
$ |
0.35 |
|
Net income per common share – diluted |
|
$ |
0.30 |
|
|
$ |
0.04 |
|
|
$ |
0.34 |
|
Statement of Income
Year Ended December 31, 2024
(In thousands, except share and per share amounts)
|
|
Pro Forma Combined Excelerate |
|
|
Management’s Adjustment |
|
|
Pro Forma Combined Excelerate As Adjusted |
|
|||
Selling, general and administrative expenses |
|
$ |
127,879 |
|
|
$ |
(25,875 |
) |
|
$ |
102,004 |
|
Income before income taxes |
|
|
150,875 |
|
|
|
25,875 |
|
|
|
176,750 |
|
Net income attributable to shareholders |
|
|
25,580 |
|
|
|
7,133 |
|
|
|
32,713 |
|
|
|
|
|
|
|
|
|
|
|
|||
Net income per common share – basic |
|
$ |
0.77 |
|
|
$ |
0.21 |
|
|
$ |
0.98 |
|
Net income per common share – diluted |
|
$ |
0.76 |
|
|
$ |
0.21 |
|
|
$ |
0.97 |
|