Excelerate Energy, Inc. (EE)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto included in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included in Item 1A of this Annual Report and our other filings with the SEC. Please also see the section titled “Forward-Looking Statements” in this Annual Report.

Overview

Excelerate is changing the way the world accesses cleaner and more reliable energy by delivering regasified natural gas, which benefits hundreds of millions of people around the world. From our founding, we have focused on providing liquefied natural gas (“LNG”) solutions to markets in diverse environments across the globe, providing a lesser emitting form of energy to markets that often rely on coal as their primary energy source. At Excelerate, we believe that access to energy sources such as LNG is critical to assisting markets in their decarbonization efforts, while at the same time promoting economic growth and improving quality of life.

Our business spans the globe, with regional presences in 11 countries and an operational presence in Argentina, Bangladesh, Brazil, Finland, Germany, Pakistan, the United Arab Emirates (“UAE”), and the United States. We are the largest provider of regasified LNG capacity in Argentina, Bangladesh, Finland and the UAE. We are also one of the largest providers of regasified LNG capacity in Brazil, where we operate the largest floating storage and regasification unit (“FSRU”), and Pakistan, where we have regasified more LNG than any other provider in the past 10 years. We intend to continue marketing natural gas and LNG, both of which offer a cleaner energy source from which power can be generated consistently, in the markets where we operate. The high value our customers place on our services has resulted in a reliable source of revenues to us. For the year ended December 31, 2024, we generated revenues of $851.4 million, net income of $153.0 million and adjusted earnings before income tax, depreciation, and amortization (“Adjusted EBITDA”) of $348.2 million. For the year ended December 31, 2023, we generated revenues of $1,159.0 million, net income of $126.8 million and Adjusted EBITDA of $346.8 million. For the year ended December 31, 2022, we generated revenues of $2,473.0 million, net income of $80.0 million and Adjusted EBITDA of $296.4 million. For more information regarding our non-GAAP measure Adjusted EBITDA and a reconciliation to net income, the most comparable U.S. Generally Accepted Accounting Principles (“GAAP”) measure, see “How We Evaluate Our Operations.”

Our business focuses on the integration of natural gas-to-power in the LNG value chain, and as part of this value chain, we operate at regasification terminals that utilize our FSRU fleet to serve economies throughout the world. Our business is substantially supported by time charter and terminal use contracts, which are effectively long-term, take-or-pay arrangements and provide consistent revenue and cash flow from our high-quality customer base. As of December 31, 2024, we operate a fleet of 10 purpose-built FSRUs, have completed more than 3,000 ship-to-ship transfers of LNG with over 50 LNG operators since we began operations and have safely delivered more than 7,300 billion cubic feet of natural gas through 16 LNG regasification terminals. For the years ended December 31, 2024, 2023 and 2022, we generated revenues of $612.2 million, $506.8 million and $445.2 million, respectively, from our FSRU and terminal services businesses, representing approximately 72%, 44% and 18% of our total revenues for each of those periods.

We also procure LNG from major producers and sell natural gas through our LNG terminals. For the years ended December 31, 2024, 2023 and 2022, we generated revenues of $239.3 million, $652.2 million and $2,027.8 million, respectively, from LNG and natural gas sales, representing approximately 28%, 56% and 82% of our total revenues for each of those periods. We believe that the commercial momentum that we have established in recent years and the increasing need for access to LNG around the world have resulted in a significant portfolio of new growth opportunities for us to pursue. In addition to our FSRU and terminal services businesses and LNG and natural gas sales, we plan to expand our business through investments in organic and inorganic commercial opportunities. We are evaluating and pursuing projects in various stages of development with opportunities in Asia Pacific, the Americas, Europe, Africa and the Middle East.

Recent Trends and Outlook

Natural gas and LNG prices rose in the fourth quarter of 2024 as compared to the third quarter of 2024. Dutch Title Transfer Facility (“TTF”) and Japan Korea Marker (“JKM”) reported average third quarter of 2024 prices of $11.53 per million British thermal units (“MMBtu”) and $13.03/MMBtu, respectively, which increased to $13.57/MMBtu and $13.94/MMBtu, respectively, in the fourth quarter of 2024.

Global LNG trade volumes reached approximately 105.7 million tons per annum (“MTPA”) in the fourth quarter of 2024, marking an 8% increase from 97.9 MTPA in the third quarter of 2024. Higher demand from Europe, fueled by precautionary measures against potential supply disruptions and heightened seasonal needs, largely drove this growth. This increased European demand elevated TTF prices relative to JKM, which resulted in the diverting of LNG cargoes away from Asia. While European demand surged by 48% quarter-over-quarter, Asian demand dropped by 2%.

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By November 1, 2024, European natural gas storage was 95% full, surpassing the European Commission’s 80% target. However, withdrawals began by mid-November and continued in the following months due to a colder 2024–2025 winter compared to the prior two years. The expiration of the Russia-Ukraine natural gas pipeline transit agreement on December 31, 2024, added further pressure on TTF prices, removing approximately 12 billion cubic meters per annum (approximately 8 MTPA) of natural gas from the European market.

Due to limited new production, global LNG supply in 2024 remained largely flat at 414 MTPA as compared to 413 MTPA in 2023, marking the slowest supply growth since 2015. While Russia’s Arctic LNG came online in October 2024 with limited operational capacity of 6.6 MTPA due to existing international sanctions, exports from that project ceased shortly afterward due to further sanctions. Two United States (“U.S.”) LNG export projects made significant advances in December 2024. The first phase of Venture Global’s Plaquemines LNG, which has an operational capacity of 13.3 MTPA, exported its first commercial cargo, and Cheniere’s Corpus Christi LNG Stage III, which has an operational capacity of over 10 MTPA, began LNG production and is expected to be substantially completed in early 2025.

Looking ahead, LNG export projects in Canada, Mexico, and Senegal, along with additional developments in the U.S., are set to ramp up in 2025, adding approximately 43.1 MTPA of new capacity. This 10% capacity increase as compared to 2024 could help alleviate price risk premiums by diversifying supply in the structurally tight global LNG market. However, geopolitical tensions, unpredictable weather, and supply-side disruptions remain potential risks to the global LNG trade in 2025.

For Excelerate, the evolving market dynamics support our growth strategy. The heightened focus on energy security, coupled with the global shift toward cleaner energy sources, will continue supporting demand for LNG. As LNG supply continues to grow, there will be an increasing need for more FSRUs to connect this supply with demand centers worldwide. This reinforces our commitment to focusing on the downstream segment of the LNG value chain, where we believe Excelerate is well positioned to be a key player in facilitating the transition to a more secure and diversified energy landscape.

Components of Our Results of Operations

Revenue

We generate revenue through the provision of regasification services using our fleet of FSRUs and LNG terminal assets, as well as physical sales of LNG and natural gas, that are made primarily in connection with our regasification and terminal projects. We provide regasification services through time charters and operation service contracts primarily related to our long-term charter and terminal use contracts. Most of our time charter revenues are from long-term contracts that function similarly to take-or-pay arrangements in that we are paid if our assets and teams are available and ready to provide services to our customers regardless of whether our customers utilize the services. We generally charge fixed fees for the use of and services provided with our vessels and terminal capacity plus additional amounts for certain variable costs.

Expenses

The principal expenses involved in conducting our business are operating costs, direct cost of gas sales, general and administrative expenses, and depreciation and amortization. A large portion of the fixed and variable costs we incur in our business are in the operation of our fleet of FSRUs and terminals that provide regasification and gas supply to our customers. We manage the level of our fixed costs based on several factors, including industry conditions and expected demand for our services and generally pass-through certain variable costs.

We incur significant equipment costs in connection with the operation of our business, including capital equipment recorded as property and equipment, net on our balance sheets and related depreciation and amortization on our income statement. In addition, we incur repair and maintenance and leasing costs related to our property and equipment utilized both in our FSRU and terminal services and gas sales. Property and equipment and other assets include costs incurred for our fleet of FSRUs and terminal assets, including capitalized costs related to drydocking activities. We are required to drydock our vessels periodically for maintenance and in accordance with applicable international regulations.

Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses include the following major cost categories: vessel operating costs; personnel costs; repair and maintenance; and leasing costs. These operating costs are incurred for both our FSRU and terminal services revenues and gas sales revenues.

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Direct cost of gas sales

Direct cost of gas sales includes the cost of LNG and other fuel and direct costs incurred in selling natural gas and LNG, which are significant variable operating costs. These costs fluctuate in proportion to the amount of our natural gas and LNG sales as well as LNG prices.

Depreciation and amortization expenses

Depreciation expense is recognized on a straight-line basis over the estimated useful lives of our property and equipment assets, less an estimated salvage value. Certain recurring repairs and maintenance expenditures required by regulators are amortized over the required maintenance period.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of compensation and other employee-related costs for personnel engaged in executive management, sales, finance, legal, tax and human resources. Selling, general and administrative expenses also consists of expenses associated with office facilities, information technology, external professional services, business development, legal costs and other administrative expenses.

Restructuring, transition and transaction expenses

We incurred restructuring, transition and transaction expenses related to consulting, legal, and audit costs incurred as part of and in preparation for our IPO.

Other income, net

Other income, net, primarily contains interest income, gains or losses from the effect of foreign exchange rates and gains and losses on asset sales.

Interest expense and Interest expense – related party

Our interest expense is primarily associated with our finance leases liabilities and loan agreements with external banks and related parties.

Earnings from equity-method investment

Earnings from equity-method investment relate to our 45% ownership interest in the joint venture with Nakilat Excelerate LLC (“Nakilat JV”), which we acquired in 2018.

Provision for income taxes

Excelerate is a corporation for U.S. federal and state income tax purposes. EELP is treated as a pass-through entity for U.S. federal income tax purposes and, as such, has generally not been subject to U.S. federal income tax at the entity level. Instead, EELP’s U.S. income is allocated to its Class A and Class B partners proportionate to their interest. In addition, EELP has international operations that are subject to foreign income tax and U.S. corporate subsidiaries subject to U.S. federal tax. These taxes are also included in our provision for income taxes.

Net income (loss) attributable to non-controlling interest

Net income (loss) attributable to non-controlling interests includes earnings allocable to our shares of Class B Common Stock, as well as earnings allocable to the third-party equity ownership interests in our subsidiaries, Excelerate Energy Bangladesh, LLC and Excelerate Albania Holding Sh.p.k.

Net income (loss) attributable to non-controlling interest – ENE Onshore

Net income (loss) attributable to non-controlling interest – ENE Onshore includes the earnings allocable to the equity ownership interests in Excelerate New England Onshore, LLC (“ENE Onshore”). On October 17, 2022, Excelerate Energy Holdings, LLC (“EE Holdings”), the indirect sole member of ENE Onshore, and EELP, the sole member of Excelerate New England Lateral, LLC (“ENE Lateral”), entered into a merger agreement, pursuant to which ENE Onshore was merged with and into ENE Lateral (the “ENE Onshore Merger”), effective October 31, 2022. ENE Lateral was the surviving entity and ENE Onshore ceased to exist as a separate entity. Prior to the ENE Onshore Merger, Excelerate consolidated ENE Onshore as a variable interest entity as Excelerate was determined to be the primary beneficiary of ENE Onshore. As a result of the ENE Onshore Merger, Excelerate ceased to have a non-controlling interest related to ENE Onshore.

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Factors Affecting the Comparability of Our Results of Operations

As a result of a number of factors, our historical results of operations may not be comparable from period to period or going forward. Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations.

Impact of the Reorganization

Following the completion of the IPO in April 2022, we are a corporation for U.S. federal and state income tax purposes. EELP is treated as a pass-through entity for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax at the entity level. Accordingly, unless otherwise specified, our historical results of operations prior to the IPO do not include provision for U.S. federal income tax for EELP. The reorganization undertaken in connection with the IPO, as described under “Organizational Structure—The Reorganization” in our prospectus (the “Prospectus”), dated April 12, 2022 and filed on April 14, 2022 with the SEC pursuant to Rule 424(b)(4) under the Securities Act (the “Reorganization”), was accounted for as a reorganization of entities under common control. As a result, our consolidated financial statements recognized the assets and liabilities received in the Reorganization at their historical carrying amounts, as reflected in the historical consolidated financial statements of EELP. In addition, in connection with the Reorganization and the IPO, we entered into the TRA with EE Holdings and the George Kaiser Family Foundation (the “Foundation”) (or their affiliates) (together, the “TRA Beneficiaries”) pursuant to which we will be required to pay the TRA Beneficiaries 85% of the net cash savings, if any, that we are deemed to realize as a result of our utilization of certain tax benefits described under “Certain Relationships and Related Person Transactions—Related Person Transactions—Transactions in Connection with our Reorganization and Initial Public Offering—Tax Receivable Agreement” in our Proxy Statement on DEF 14A filed on April 16, 2024.

Also included in the Reorganization is our acquisition of all of the issued and outstanding membership interests in Excelsior, LLC and FSRU Vessel (Excellence), LLC (f/k/a Excellence, LLC) (collectively, the “Foundation Vessels”). The acquisition of Excelsior, LLC was accounted for as an acquisition of property and equipment at the completion of the Reorganization. The Foundation Vessels had historically been accounted for as finance leases in our historical financial statements. In 2018, EELP entered into an agreement with a customer to lease Excellence with the vessel transferring ownership to the customer at the conclusion of the agreement for no additional consideration. Historically, EELP, as a lessor, has accounted for Excellence contract with our customer as a sales-type lease in the consolidated balance sheet in accordance with Accounting Standards Codification 842, Leases. The Excellence contract with our customer continues to be accounted for as a sales-type lease and thus did not result in an adjustment to property and equipment.

Depreciation Expense

During the fourth quarter of 2023, we performed a review of the estimated useful lives of our FSRU vessels. As a relatively new asset class, being first built in 2005, we initially estimated a useful life of 30 years with no salvage value. As the vessels approach almost 20 years of life, there has been improved visibility into the expected term of FSRU productive capabilities, demand, and salvage potential. As a result, we changed the useful lives of our FSRU vessel assets to 40 years and added an estimated salvage value.

How We Evaluate Our Operations

We operate in a single reportable segment. However, we use a variety of qualitative, operational and financial metrics to assess our performance and valuation. Among other measures, management considers each of the following in assessing our business:

Adjusted Gross Margin;

Adjusted EBITDA; and

Capital Expenditures.

Adjusted Gross Margin

We use Adjusted Gross Margin, a non-GAAP financial measure, which we define as revenues less direct cost of sales and operating expenses, excluding depreciation and amortization, to measure our operational financial performance. Management believes Adjusted Gross Margin is useful because it provides insight on profitability and true operating performance excluding the implications of the historical cost basis of our assets. Our computation of Adjusted Gross Margin may not be comparable to other similarly titled measures of other companies, and you are cautioned not to place undue reliance on this information.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure included as a supplemental disclosure because we believe it is a useful indicator of our operating performance. We define Adjusted EBITDA as net income before interest expense, income taxes, depreciation and amortization, accretion, non-cash long-term incentive compensation expense and items such as charges and non-recurring expenses that management does not consider as part of assessing ongoing operating performance.

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We adjust net income for the items listed above to arrive at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. This measure has limitations as certain excluded items are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. For the foregoing reasons, Adjusted EBITDA has significant limitations that affect its use as an indicator of our profitability and valuation, and you are cautioned not to place undue reliance on this information.

Capital Expenditures

We incur capital expenditures as part of our regular business operations. Capital expenditures are costs incurred to expand our business operations, increase the efficiency of business operations, extend the life of an existing asset, improve an asset’s capabilities, increase the future service of an asset, repair existing assets in order to maintain their service capability, and provide the upkeep required for regulatory compliance. Costs related to prospective projects are capitalized once it is determined to be probable that the related assets will be constructed.

The tables below reconcile the financial measures discussed above to the most directly comparable financial measure calculated and presented in accordance with GAAP:

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Consolidated Results of Operations

Years Ended December 31, 2024, 2023 and 2022

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Net income

Net income was $153.0 million for the year ended December 31, 2024, an increase of $26.2 million, as compared to $126.8 million for the year ended December 31, 2023. Net income was higher primarily due to the update to our useful life assumption in the fourth quarter of 2023 ($17.9 million), various charter rate increases ($14.3 million), a full year of earnings from our charter with Germany ($8.1 million), a decrease in the provision for income taxes ($7.1 million), lower interest expense due to decreased debt balances ($5.1 million), an increase in interest income ($4.0 million), and the benefit of the Sequoia acquisition ($4.0 million), partially offset by a decrease due to the transition of Sequoia to a time charter party (“TCP”) agreement in the first quarter of 2024 ($22.3 million), increased selling, general and administrative expenses primarily due to business development activities and long-term incentive compensation ($6.7 million), a decrease in other gas sales opportunities ($4.0 million), and increased personnel costs in Argentina ($3.7 million).

Gross Margin and Adjusted Gross Margin

Gross Margin was $309.1 million for the year ended December 31, 2024, an increase of $11.0 million, as compared to $298.1 million for the year ended December 31, 2023. For the year ended December 31, 2024, Adjusted Gross Margin was $408.1 million, a decrease of $4.3 million, as compared to $412.4 million for the year ended December 31, 2023. Gross Margin and Adjusted Gross

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Margin were affected primarily by various charter rate increases ($14.3 million), a full year of earnings from our charter with Germany ($8.1 million), and lower operating lease expense due to the acquisition of Sequoia ($6.0 million), partially offset by a decrease due to the transition of Sequoia to a time charter party (“TCP”) agreement in the first quarter of 2024 ($22.3 million), a decrease in other gas sales opportunities ($4.0 million), and increased personnel costs in Argentina ($3.7 million). Gross Margin was also improved by the update to our useful life assumption in the fourth quarter of 2023 ($17.9 million), partially offset by higher depreciation expense as a result of our acquisition of Sequoia ($2.0 million).

Adjusted EBITDA

Adjusted EBITDA was $348.2 million for the year ended December 31, 2024, an increase of $1.4 million, as compared to $346.8 million for the year ended December 31, 2023. Adjusted EBITDA was higher primarily due to various charter rate increases ($14.3 million), a full year of earnings from our charter with Germany ($8.1 million), lower operating lease expense due to the acquisition of Sequoia ($6.0 million), and an increase in interest income ($4.0 million), partially offset by a decrease due to the transition of Sequoia to a TCP agreement in the first quarter of 2024 ($22.3 million), a decrease in other gas sales opportunities ($4.0 million), increased personnel costs in Argentina ($3.7 million), and increased selling, general and administrative expenses primarily due to business development activities ($3.1 million).

For more information regarding our non-GAAP measures Adjusted Gross Margin and Adjusted EBITDA, and a reconciliation to their most comparable GAAP measures, see “—How We Evaluate Our Operations.”

FSRU and terminal services revenues

FSRU and terminal services revenues were $612.2 million for the year ended December 31, 2024, an increase of $105.4 million as compared to $506.8 million for the year ended December 31, 2023. FSRU and terminal services revenues were higher primarily due to beginning our TCP agreement in Brazil in the first quarter of 2024 and our charter in Germany and various charter rate increases, partially offset by 2023 seasonal service in Argentina.

Gas sales revenues

Gas sales revenues were $239.3 million for the year ended December 31, 2024, a decrease of $412.9 million, as compared to $652.2 million for the year ended December 31, 2023. The decrease was primarily due to the completion of our natural gas sales agreement in Brazil in December 2023 and gas sales into Finland in the first quarter of 2023, partially offset by increased LNG sales in Asia Pacific and a partial LNG cargo sale in the Atlantic Basin in the fourth quarter of 2024.

Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses was $215.6 million for the year ended December 31, 2024, a decrease of $12.6 million, as compared to $228.2 million for the year ended December 31, 2023. The decrease in cost of revenue and vessel operating expenses was primarily due to lower expenses in Brazil as a result of transitioning to a TCP agreement in the first quarter of 2024, 2023 drydock costs on Excellence, and lower operating lease expense due to the acquisition of Sequoia, partially offset by drydock costs on Summit LNG and increased personnel costs in Argentina.

Direct cost of gas sales

Direct cost of gas sales was $227.7 million for the year ended December 31, 2024, a decrease of $290.7 million, as compared to $518.4 million for the year ended December 31, 2023. The decrease was primarily due to the completion of our natural gas sales agreement in Brazil in December 2023 and gas sales into Finland in the first quarter of 2023, partially offset by increased LNG sales in Asia Pacific and a partial LNG cargo sale in the Atlantic Basin in the fourth quarter of 2024.

Depreciation and amortization expenses

Depreciation and amortization expenses were $98.9 million for the year ended December 31, 2024, a decrease of $15.4 million, as compared to $114.3 million for the year ended December 31, 2023. Depreciation and amortization decreased primarily due to the update to our useful life assumptions and accelerated depreciation recognized in the second quarter of 2023 for assets removed from service, partially offset by increases from the acquisition of Sequoia in the second quarter of 2023 and extended commissioning time on our power barge assets in Albania.

Selling, general and administrative expenses

Selling, general and administrative expenses were $94.1 million for the year ended December 31, 2024, an increase of $6.6 million, as compared to $87.5 million for the year ended December 31, 2023. Selling, general and administrative expenses increased primarily due to increased business development activities and long-term incentive compensation.

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Interest expense

Interest expense was $47.4 million for the year ended December 31, 2024, a decrease of $5.1 million, as compared to $52.5 million for the year ended December 31, 2023. Interest expense decreased due to accelerated amortization of deferred issuance costs related to the Amended Credit Agreement (as defined herein) recognized in the year ended 2023, partially offset by our entering into the Term Loan Facility (as defined herein) in the second quarter of 2023.

Other income, net

Other income, net was $22.9 million for the year ended December 31, 2024, an increase of $7.3 million as compared to $15.6 million for the year ended December 31, 2023. The increase was primarily due to higher interest income received on cash balances invested in money market funds.

Provision for income taxes

The provision for income taxes for the years ended December 31, 2024 and 2023 was $26.1 million and $33.2 million, respectively. The decrease was primarily attributable to the year-over-year change in the geographical distribution of income.

The effective tax rate for the years ended December 31, 2024 and 2023 was 14.6% and 20.8%, respectively. The decrease was primarily driven by the geographical distribution of income and the varying tax regimes of jurisdictions.

Excelerate is a corporation for U.S. federal and state income tax purposes. EELP is treated as a pass-through entity for U.S. federal income tax purposes and, as such, has generally not been subject to U.S. federal income tax at the entity level.

We have international operations that are also subject to foreign income tax and U.S. corporate subsidiaries subject to U.S. federal tax. Therefore, its effective income tax rate is dependent on many factors, including the geographical distribution of income, a rate benefit attributable to the portion of our earnings not subject to corporate level taxes, and the impact of nondeductible items and foreign exchange impacts as well as varying tax regimes of jurisdictions. In one jurisdiction, our tax rate is significantly less than the applicable statutory rate as a result of a tax holiday that was granted. This tax holiday will expire in 2033 at the same time that our contract and revenue with our customer ends.

Net income attributable to non-controlling interest

Net income attributable to non-controlling interest was $120.2 million for the year ended December 31, 2024, an increase of $23.8 million, as compared to $96.4 million for the year ended December 31, 2023. The increase in net income attributable to non-controlling interest was primarily due to higher net income attributable to owners of our Class B Common Stock.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Net income

Net income was $126.8 million for the year ended December 31, 2023, an increase of $46.8 million, as compared to $80.0 million for the year ended December 31, 2022. Net income was higher primarily due to new charters in Finland and Germany, and higher rates on charters in Brazil, Argentina and the UAE, partially offset by the end of our contract in Israel in the fourth quarter of 2022 ($41.0 million), lower operating lease expense due to the acquisition of Sequoia ($22.4 million), the early extinguishment of the Excellence finance lease liability as part of the vessel acquisition ($21.8 million), higher interest income received on cash balances invested in money market funds ($17.3 million), higher direct margin earned on gas sales in Brazil, Finland and Bangladesh during the year ended December 31, 2023 ($133.8 million), which exceeded direct margin earned on gas sales that occurred in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), less interest expense – related party incurred in the year ended December 31, 2023 due to the acquisition of the Foundation Vessels (as defined herein) ($7.9 million), improved utilization resulting in lower idle vessel costs in 2023 ($7.7 million), lower restructuring, transition and transaction expenses after the completion of our IPO in April 2022 ($6.9 million), and one of our vessels coming off of suspension in the second quarter of 2022 ($5.6 million), partially offset by an increase in selling, general and administrative expenses ($21.4 million), as discussed below, the drydocking of one of our vessels, Excellence, that is accounted for as a sales-type lease ($20.3 million), an increase in interest expense ($18.5 million), primarily due to the new Term Loan Facility, extended commissioning time for our power barge assets in Albania ($8.7 million), an increase in depreciation and amortization ($8.3 million), primarily as a result of acquiring Sequoia and Excelsior in the second quarters of 2023 and 2022, respectively, an increase in operating personnel costs ($6.7 million), increases in repairs and maintenance ($5.0 million), and an increase in the provision for income taxes ($4.9 million), as discussed below.

Gross Margin and Adjusted Gross Margin

Gross Margin was $298.1 million for the year ended December 31, 2023, an increase of $38.4 million, as compared to $259.7 million for the year ended December 31, 2022. Adjusted Gross Margin was $412.4 million for the year ended December 31, 2023, an increase of $55.4 million, as compared to $357.0 million for the year ended December 31, 2022. Gross Margin and Adjusted Gross

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Margin were higher primarily due to new charters in Finland and Germany, and higher rates on charters in Brazil, Argentina and the UAE, partially offset by the end of our contract in Israel in the fourth quarter of 2022 ($41.0 million), lower operating lease expense due to the acquisition of Sequoia ($22.4 million), higher direct margin earned on gas sales in Brazil, Finland and Bangladesh during the year ended December 31, 2023 ($133.8 million), which exceeded direct margin earned on gas sales that occurred in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), improved utilization resulting in lower idle vessel costs in 2023 ($7.7 million), and one of our vessels coming off of suspension in the second quarter of 2022 ($5.6 million), partially offset by the drydocking of one of our vessels, Excellence, that is accounted for as a sales-type lease ($20.3 million), an increase in operating personnel costs ($6.7 million) and increases in repairs and maintenance ($5.0 million). The increase in Gross Margin was also offset by extended commissioning time for our power barge assets in Albania ($8.7 million) and an increase in depreciation and amortization expense ($8.3 million), primarily as a result of acquiring Sequoia and Excelsior in the second quarters of 2023 and 2022, respectively.

Adjusted EBITDA

Adjusted EBITDA was $346.8 million for the year ended December 31, 2023, an increase of $50.4 million, as compared to $296.4 million for the year ended December 31, 2022. Adjusted EBITDA was higher primarily due to new charters in Finland and Germany, and higher rates on charters in Brazil, Argentina and the UAE, partially offset by the end of our contract in Israel in the fourth quarter of 2022 ($41.0 million), lower operating lease expense due to the acquisition of Sequoia ($22.4 million), higher interest income received on cash balances invested in money market funds ($17.3 million), higher direct margin earned on gas sales in Brazil, Finland and Bangladesh during the year ended December 31, 2023 ($133.8 million), which exceeded direct margin earned on gas sales that occurred in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), improved utilization resulting in lower idle vessel costs in 2023 ($7.7 million), and one of our vessels coming off of suspension in the second quarter of 2022 ($5.6 million), partially offset by an increase in selling, general and administrative expenses ($21.4 million), as discussed below, the drydocking of one of our vessels, Excellence, that is accounted for as a sales-type lease ($20.3 million), an increase in operating personnel costs ($6.7 million) and increases in repairs and maintenance ($5.0 million).

For more information regarding our non-GAAP measures Adjusted Gross Margin and Adjusted EBITDA, and a reconciliation to their most comparable GAAP measures, see “—How We Evaluate Our Operations.”

FSRU and terminal services revenues

FSRU and terminal services revenues were $506.8 million for the year ended December 31, 2023, an increase of $61.6 million, as compared to $445.2 million for the year ended December 31, 2022. FSRU and terminal services revenues were higher primarily due to the Exemplar charter beginning in Finland in the fourth quarter of 2022, seasonal service by Excelsior in Argentina before redelivery to Germany at the end of the third quarter of 2023, and higher daily rates in Brazil, Argentina and the UAE, partially offset by the end of our contract with Israel in the fourth quarter of 2022.

Gas sales revenues

Gas sales revenues were $652.2 million for the year ended December 31, 2023, a decrease of $1,375.6 million, as compared to $2,027.8 million for the year ended December 31, 2022. The decrease was primarily due to a reduction of natural gas sales volumes and prices related to our terminal operations in Brazil and of LNG sales at our terminal in New England during the year ended December 31, 2022, partially offset by an increase in LNG sales in Bangladesh during the year ended December 31, 2023.

Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses was $228.2 million for the year ended December 31, 2023, an increase of $19.0 million, as compared to $209.2 million for the year ended December 31, 2022. The increase in cost of revenue and vessel operating expenses was primarily due to drydock costs on Excellence, higher repairs and maintenance on our other vessels, personnel costs and positioning costs associated with seasonal service in Argentina, partially offset by lower operating lease expense due to the acquisition of Sequoia, and improved utilization resulting in lower idle vessel costs in 2023.

Direct cost of gas sales

Direct cost of gas sales was $518.4 million for the year ended December 31, 2023, a decrease of $1,388.4 million, as compared to $1,906.8 million for the year ended December 31, 2022. The decrease was primarily due to a reduction of natural gas sales volumes related to our terminal operations in Brazil and of LNG sales at our terminal in New England during the year ended December 31, 2022, partially offset by LNG sales in Bangladesh during the year ended December 31, 2023.

Depreciation and amortization expenses

Depreciation and amortization expenses were $114.3 million for the year ended December 31, 2023, an increase of $17.0 million, as compared to $97.3 million for the year ended December 31, 2022. Depreciation and amortization increased primarily due to the acquisition of Sequoia in the second quarter of 2023, extended commissioning time for our power barge assets in Albania, and

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accelerated depreciation recognized for assets removed from service on one of our vessels in the second quarter of 2023, partially offset by a decrease due to the update to our useful life assumptions.

Selling, general and administrative expenses

Selling, general and administrative expenses were $87.5 million for the year ended December 31, 2023, an increase of $21.4 million, as compared to $66.1 million for the year ended December 31, 2022. The increase was primarily due to incremental costs incurred in conjunction with our transition to a publicly traded company, expenses related to new contracts in Europe, and additional business development activities.

Restructuring, transition and transaction expenses

We had no restructuring, transition and transaction expenses for the year ended December 31, 2023. Restructuring, transition and transaction expenses relating to the completion of our IPO in April 2022 were $6.9 million for the year ended December 31, 2022.

Interest expense

Interest expense was $52.5 million for the year ended December 31, 2023, an increase of $18.6 million, as compared to $33.9 million for the year ended December 31, 2022. Interest expense increased primarily due to the new Term Loan Facility (as defined herein), accelerated amortization of deferred issuance costs related to the Amended Credit Agreement, and increases in London Interbank Offered Rate (“LIBOR”) and the Secured Overnight Financing Rate (“SOFR”) rates, partially offset by lower balances remaining on our finance leases and long-term debt.

Interest expense – related party

Interest expense – related party was $14.5 million for the year ended December 31, 2023, a decrease of $11.1 million, as compared to $25.6 million for the year ended December 31, 2022. Interest expense decreased primarily due to the acquisition of the Foundation Vessels (as defined herein) in the second quarter of 2022.

Early extinguishment of lease liability on vessel acquisition

In the year ended December 31, 2022, we incurred a $21.8 million expense as a result of the difference between the consideration given to acquire Excellence and the historical finance lease liability.

Other income, net

Other income, net was $15.6 million for the year ended December 31, 2023, an increase of $15.3 million, as compared to $0.3 million for the year ended December 31, 2022. The increase was primarily due to higher interest income received on cash balances invested in money market funds and lower foreign currency exchange losses related to our operations in Brazil.

Provision for income taxes

The provision for income taxes for the years ended December 31, 2023 and 2022 was $33.2 million and $28.3 million, respectively. The increase was primarily attributable to the year-over-year change in the geographical distribution of income.

The effective tax rate for the years ended December 31, 2023 and 2022 was 20.8% and 26.1%, respectively. The decrease was primarily driven by the geographical distribution of income and the varying tax regimes of jurisdictions. Our 2022 effective tax rate was also impacted by the reduction of income before tax due to the loss on early extinguishment of the lease liability on acquisition of Excellence without a corresponding tax benefit, which increased our effective tax rate by 4.2% for the year ended December 31, 2022.

Excelerate is a corporation for U.S. federal and state income tax purposes. EELP is treated as a pass-through entity for U.S. federal income tax purposes and, as such, has generally not been subject to U.S. federal income tax at the entity level. Accordingly, unless otherwise specified, our historical results of operations prior to the IPO do not include any provision for U.S. federal income tax for EELP.

We have international operations that are also subject to foreign income tax and U.S. corporate subsidiaries subject to U.S. federal tax. Therefore, our effective income tax rate is dependent on many factors, including geographical distribution of income, a rate benefit attributable to the portion of our earnings not subject to corporate level taxes, and the impact of nondeductible items and foreign exchange impacts as well as varying tax regimes of jurisdictions. In one jurisdiction, our tax rate is significantly less than the applicable statutory rate as a result of a tax holiday that was granted. This tax holiday will expire in 2033 at the same time that our contract and revenue with our customer ends.

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Net income attributable to non-controlling interest

Net income attributable to non-controlling interest was $96.4 million for the year ended December 31, 2023, an increase of $41.3 million, as compared to $55.1 million for the year ended December 31, 2022. The increase in net income attributable to non-controlling interest was primarily due to higher net income and the addition of non-controlling interest related to owners of our Class B Common Stock after our IPO.

Net loss attributable to non-controlling interest – ENE Onshore

Net loss attributable to non-controlling interest – ENE Onshore was $1.4 million for the year ended December 31, 2022. In October 2022, ENE Onshore merged with and into ENE Lateral.

Liquidity and Capital Resources

Based on our cash positions, cash flows from operating activities and borrowing capacity on our debt facilities, we believe we will have sufficient liquidity for the next 12 months for ongoing operations, planned capital expenditures, other investments, debt service obligations, payment of tax distributions and our announced and expected quarterly dividends and distributions, as described in Part II, Item 5 – Our Dividend and Distribution Policy. For more information regarding our planned dividend payments, see Note 12 – Equity. As of December 31, 2024, we had $537.5 million in unrestricted cash and cash equivalents.

At times, we purchase and sell natural gas and LNG. Some of the inventory purchases that we make to fulfill these sales could potentially exceed cash on hand. We plan to fund any cash shortfalls with borrowings under the EE Revolver (as defined herein). Management believes the EE Revolver will provide sufficient liquidity to execute our contractual purchase obligations. In the event sufficient funds were not available under the EE Revolver, we would seek alternative funding sources.

We have historically funded our business, including meeting our day-to-day operational requirements, repaying our indebtedness and funding capital expenditures, through debt financing, capital contributions and our operating cash flows as discussed below. We expect that our future principal uses of cash will also include additional capital expenditures to fund our growth strategy, pay income taxes and make distributions from EELP to fund income taxes, fund our obligations under the TRA, and pay cash dividends and distributions. Any determination to pay dividends to holders of our common stock and distributions to holders of EELP’s Class B interests will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, covenant compliance, restrictions in our existing and any future debt and other factors that our board of directors deems relevant. In the future we may enter into arrangements to grow our business or acquire or invest in complementary businesses which could decrease our cash and cash equivalents and increase our cash requirements. As a result of these and other factors, we could use our available capital resources sooner than expected and may be required to seek additional equity or debt.

Repurchase of Equity Securities

On February 22, 2024, our board of directors approved a share repurchase program (the “Share Repurchase Program”) to purchase up to $50.0 million of our Class A Common Stock. The board of directors approved the Share Repurchase Program because it believed that it (i) would be a prudent use of our available cash, (ii) would enhance the long-term value of the Class A Common Stock, (iii) would demonstrate management’s and the board of directors’ confidence in the business and (iv) was advisable and in the best interests of the Company. The timing, manner, price and amount of any Class A Common Stock repurchases under the Share Repurchase Program were determined by us in our discretion and depended on a variety of factors, including legal requirements, price, and business, economic, and market conditions. The Share Repurchase Program was completed in December 2024 as the Company had repurchased the maximum approved amount of $50 million.

During the year ended December 31, 2024, pursuant to the Stock Repurchase Program we repurchased 2,473,787 shares of our outstanding Class A Common Stock at a weighted average price of $20.41 per share, for a total net cost of approximately $50.0 million. For more information, see Part II – Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Repurchase of Equity by Issuer.

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Cash Flow Statement Highlights

Years Ended December 31, 2024, 2023 and 2022

Operating Activities

Cash flows provided by operating activities increased by $12.5 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to differences in the timing of collections and payments related to gas purchases and sales and collections received after our power barge assets went into service, partially offset by drydock expenditures and increased cash tax payments.

Cash flows provided by operating activities increased by $6.8 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to differences in the timing of TCP invoice collections and drydocks, partially offset by differences in the timing of collections and payments related to gas purchases and sales.

Investing Activities and Capital Expenditures

Cash flows used in investing activities were primarily comprised of capital expenditures made for the purchases of property and equipment, which decreased by $195.3 million for the year ended December 31, 2024, as compared to the same period in 2023. The decrease was primarily due to the 2023 purchase of Sequoia, partially offset by our milestone payment under the Newbuild Agreement (as defined herein).

Cash flows used in investing activities were comprised of capital expenditures made for the purchases of property and equipment, which increased by $189.4 million for the year ended December 31, 2023, as compared to the same period in 2022. The increase was primarily due to the purchase of Sequoia and vessel upgrades made ahead of beginning service at the Inkoo Terminal in Finland.

Financing Activities

Financing activities cash flows decreased by $260.4 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to $250.0 million in proceeds received from the Term Loan Facility in 2023, $50.0 million in cash paid under the Share Repurchase Program in 2024, a $6.3 million increase in distributions, and a $2.2 million decrease in contributions received from our minority owner related to the Albania Power Project, partially offset by a $41.3 million decrease in repayments on long-term debt and payments of $7.7 million for debt issuance costs in 2023.

Cash flows provided by financing activities decreased by $229.8 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to proceeds of $412.1 million from the IPO sale of Class A Common Stock in 2022, a $13.4 million increase in distributions to shareholders and joint venture partners and $6.6 million of repayments on a note receivable from George B. Kaiser (together with his affiliates other than the Company, “Kaiser”) during the year ended December 31, 2022, partially offset by $174.8 million increase in net borrowings on our long-term debt and Term Loan Facility (as defined herein) and $25.0 million in cash payments in 2022 made as part of the early extinguishment of a lease liability related to our acquisition of the Foundation Vessels.

Debt Facilities

Revolving Credit Facility and Term Loan Facility

On April 18, 2022, EELP entered into a senior secured revolving credit agreement, by and among EELP, as borrower, Excelerate, as parent, the lenders party thereto, the issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which the lenders and issuing banks thereunder made available a revolving credit facility (the “EE Revolver”), including a letter of credit sub-facility, to EELP. The EE Revolver enabled us to borrow up to $350.0 million over a three-year term originally set to expire in April 2025.

Also, on April 18, 2022, the Company borrowed under the EE Revolver, on the closing day of such facility, and used the proceeds to repay the KFMC Note (as defined herein) in full. The KFMC Note was terminated in connection with such repayment.

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On March 17, 2023, EELP entered into an amended and restated senior secured credit agreement (“Amended Credit Agreement”), by and among EELP, as borrower, Excelerate, as parent, the lenders party thereto, the issuing banks party thereto and Wells Fargo Bank, N.A., as administrative agent. Under the Amended Credit Agreement, EELP obtained a new $250.0 million term loan facility (the “Term Loan Facility” and, together with the EE Revolver as amended by the Amended Credit Agreement, the “EE Facilities”). The EE Facilities mature in March 2027. The Amended Credit Agreement requires EELP to maintain (i) a maximum consolidated total leverage of 3.50x, provided that, if the aggregate value of all unsecured debt is equal to or greater than $250.0 million, the maximum permitted consolidated total leverage increases to 4.25x, (ii) collateral vessel maintenance coverage to be not less than the greater of (a) $750.0 million and (b) 130% of the sum of the total credit exposure under the Amended Credit Agreement and (iii) a minimum consolidated interest coverage ratio of 2.50x. Proceeds from the EE Revolver may be used for working capital and other general corporate purposes and up to $305.0 million of the EE Revolver may be used for letters of credit.

In April 2023, we purchased Sequoia for $265.0 million using $250.0 million borrowed through our Term Loan Facility together with cash on hand. Concurrently with the purchase, we entered into interest rate swaps for the same notional amount as the Term Loan Facility. The purpose of the swaps is to hedge our exposure to fluctuations in SOFR related to borrowings on the Term Loan Facility. The interest rate swaps have maturity, payment and reset dates that align with those of the Term Loan Facility.

On September 8, 2023, EELP entered into an amendment to the Amended Credit Agreement (the “First Amendment”). The First Amendment provides for, among other things (i) inclusion of commodity and foreign exchange swap termination value in the collateral vessel maintenance coverage test and (ii) an update to the ordering of payment applications in the event of default.

In December 2023, we paid off $55.2 million of the principal outstanding on our Term Loan Facility. We also terminated the same notional value of the interest rate swaps we had previously entered into to hedge the fluctuations in the SOFR rates associated with the variable interest rate on the loan.

Borrowings under the EE Facilities bear interest at a per annum rate equal to the term SOFR reference rate for such period plus an applicable margin, which applicable margin is based on EELP’s consolidated total leverage ratio as defined and calculated under the Amended Credit Agreement and can range from 2.75% to 3.50%. The unused portion of the EE Revolver commitment is subject to an unused commitment fee calculated at a rate per annum ranging from 0.375% to 0.50% based on EELP's consolidated total leverage ratio.

The Amended Credit Agreement contains customary representations, warranties, covenants (affirmative and negative, including maximum consolidated total leverage ratio, minimum consolidated interest coverage ratio, and collateral vessel maintenance coverage covenants), and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of amounts borrowed under the EE Facilities. As of December 31, 2024, the Company had issued $22.8 million in letters of credit under the EE Revolver. As a result of the EE Revolver’s financial ratio covenants and after taking into account the outstanding letters of credit issued under the facility, all of the $327.2 million of undrawn capacity was available for additional borrowings as of December 31, 2024.

Experience Vessel Financing

In December 2016, the Company entered into a sale leaseback agreement with a third party to provide $247.5 million of financing for Experience (the “Experience Vessel Financing”). Due to the Company’s requirement to repurchase the vessel at the end of the term, the transaction was accounted for as a failed sale leaseback (a financing transaction). Under the Experience Vessel Financing agreement, the Company is deemed the owner of the vessel and continues to recognize the vessel on its consolidated balance sheets, with the proceeds received recorded as a financial obligation. As amended, the Company makes quarterly principal payments of $3.1 million and interest payments at the three-month SOFR plus 3.4% and the loan has a maturity date of December 2033. After the final quarterly payment in December 2033, there will be no remaining balance due.

In the second quarter of 2023, the agreement was amended to convert the reference rate in the Experience Vessel Financing from the LIBOR to the SOFR yield curve. Prior to the amendment, the Company made interest payments at the three-month LIBOR plus 3.25%. Debt issuance costs of $7.2 million related to the original loan and subsequent amendments are presented as a direct deduction from the debt and are being amortized over the life of the original loan. The agreement contains certain security rights related to Experience in the event of default.

The Company’s vessel financing loan has certain financial covenants as well as customary affirmative and negative covenants. EELP must maintain a minimum equity of $500.0 million, a maximum debt-to-equity ratio of 3.5 to 1 and a minimum cash and cash equivalents balance, including loan availability, of $20.0 million. The agreement also requires that a three-month debt service reserve be funded and that the value of the vessel equal or exceed 110% of the remaining amount outstanding, in addition to other affirmative and negative covenants customary for vessel financings. The financing also requires the vessel to carry the typical vessel marine insurances.

2017 Bank Loans

On June 23, 2017, we entered into two loan agreements with external banks (the “2017 Bank Loans”) to finance the Moheshkhali LNG (“MLNG”) terminal in Bangladesh. The first arrangement allowed us to borrow up to $32.8 million. The loan accrues interest at

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the six-month SOFR plus 2.85%. Payments are due semi-annually with an original scheduled maturity date of April 15, 2030. We partially prepaid the loan during 2019. As a result of this prepayment, the loan matures on October 15, 2029. In the fourth quarter of 2023, we executed an amendment to convert the reference rate from the LIBOR to the SOFR yield curve effective on the first interest payment date occurring after June 30, 2023. Prior to the amendment, the Company made interest payments at the six-month LIBOR plus 2.42%. The debt issuance costs of $1.3 million are presented as a direct reduction from the debt liability and are amortized over the life of the loan.

The second arrangement allowed us to draw funds up to $92.8 million. The loan accrues interest at the three-month SOFR plus 4.76%. Payments are due quarterly with an original scheduled maturity date of April 15, 2030. We partially prepaid the loan during 2019. As a result of this prepayment, the loan matures on October 15, 2029. In the fourth quarter of 2023, we executed an amendment to convert the reference rate from the LIBOR to the SOFR yield curve effective on the first interest payment date occurring after June 30, 2023. Prior to the amendment, the Company made interest payments at the three-month LIBOR plus 4.50%. Debt issuance costs of $4.8 million are presented as a direct deduction from the debt liability and are amortized over the life of the loan. The agreement contains certain security rights related to MLNG terminal assets and project contracts in the event of default.

The 2017 Bank Loans require compliance with certain financial covenants, as well as customary affirmative and negative covenants associated with limited recourse project financing facilities. The loan agreements also require that a six-month debt service reserve amount be funded and that an off-hire reserve amount be funded monthly to cover operating expenses and debt service while the vessel is away during drydock major maintenance. The loan agreements also require that the MLNG terminal and project company be insured on a stand-alone basis with property insurance, liability insurance, business interruption insurance and other customary insurance policies. The respective project company must have a quarterly debt service coverage ratio of at least 1.10 to 1. In 2021, 2022, 2023 and 2024, waivers were obtained for immaterial non-financial covenants and are still in effect.

Exquisite Vessel Financing

In June 2018, we entered into a sale leaseback agreement with the Nakilat JV to provide $220.0 million of financing via a fifteen-year lease agreement for Exquisite at 7.73%. The lease agreement has a symmetrical put and call option at the end of the original term or, optionally, two five-year extensions with symmetrical put and call options after each extension. The agreement did not meet the terms for recognition of a sale leaseback transaction and instead was treated as financing due to the terms of the transaction. The agreement contains certain security rights related to Exquisite in the event of default.

KFMC Note

In November 2018, the Company entered into a promissory note (the “KFMC Note”) with Kaiser-Francis Management Company, L.L.C. (“KFMC”), an affiliate of Kaiser, as lender. The KFMC Note, as amended, allowed for a maximum commitment amount of up to $260 million, had a maturity date of December 31, 2023, and had an interest rate of LIBOR plus 1.55%. Upon consummation of the IPO, the KFMC Note was replaced by the EE Revolver, as discussed in Note 10 – Long-term debt, net.

KFMC-ENE Onshore Note

In September 2021, ENE Lateral assigned to KFMC all of its rights, title and interest to receive payment under a note with ENE Onshore (the “KFMC-ENE Onshore Note”), which assignment was made in partial satisfaction of the amounts owed by ENE Lateral to KFMC under a promissory note it entered into with KFMC in December 2015. As a result of such assignment, ENE Onshore was obligated to pay KFMC all amounts under the KFMC-ENE Onshore Note. In November 2021, KFMC and ENE Onshore entered into an amended and restated note allowing a maximum commitment of $25.0 million. The KFMC-ENE Onshore Note was settled in full and canceled in connection with the ENE Onshore Merger.

As of December 31, 2024, the Company was in compliance with the covenants under its debt facilities.

Foundation Vessels Purchase

In April 2022, in exchange for (i) 7,854,167 shares of Class A Common Stock with a fair market value of $188.5 million, (ii) a cash payment of $50.0 million and (iii) $21.5 million of estimated future payments under the TRA, EELP purchased from Maya Maritime LLC, a wholly-owned subsidiary of the Foundation, all of the issued and outstanding membership interests in the Foundation Vessels. In 2018, EELP entered into an agreement with a customer to lease Excellence with the vessel transferring ownership to the customer at the conclusion of the agreement for no additional consideration. Historically, EELP, as a lessor, has accounted for Excellence contract with our customer as a sales-type lease in the consolidated balance sheet in accordance with Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”). Excellence will continue to be accounted for as a sales-type lease and thus did not result in an adjustment to property and equipment. The difference between the consideration given to acquire Excellence and the historical finance lease liability resulted in a $21.8 million early extinguishment of lease liability loss on our consolidated statements of income.

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Other Contractual Obligations

Operating Leases

We lease offices in various locations under noncancelable operating leases. As of December 31, 2023, we had future minimum lease payments totaling $7.3 million. As of December 31, 2024, we had future minimum lease payments totaling $5.6 million and are committed to $1.8 million in year one, $2.5 million for years two and three, $1.3 million for years four and five and no payments thereafter.

Finance Leases

Certain enforceable vessel charters and pipeline capacity agreements are classified as finance leases, and the right-of-use assets are included in property and equipment. As of December 31, 2023, we had future minimum lease payments totaling $274.1 million. As of December 31, 2024, we had future minimum lease payments totaling $240.4 million and are committed to $33.2 million in payments in year one, $66.5 million for years two and three, $55.2 million for years four and five, and $85.5 million thereafter.

Newbuild Agreement Commitments

In October 2022, we signed a binding shipbuilding contract (“the Newbuild Agreement”) with HD Hyundai Heavy Industries for a new FSRU to be delivered in 2026. As part of and related to the Newbuild Agreement, our milestone payments are due in installments with the final installment due concurrently with the delivery of the vessel, which is expected in 2026. During the year ended December 31, 2022, we made the first milestone payment of approximately $30 million. In the fourth quarter of 2024, we made a milestone payment of approximately $50 million, leaving approximately $260 million in remaining spend. Our near-term payment commitments related to the Newbuild Agreement are expected to be approximately $30 million in the first quarter of 2025 and $20 million in the second quarter of 2025, with the remainder due beyond the next twelve months.

Tax Receivable Agreement

In April 2022, we entered into the TRA with the TRA Beneficiaries. The TRA will provide for payment by us to the TRA Beneficiaries of 85% of the amount of the net cash tax savings, if any, that we are deemed to realize as a result of our utilization of certain tax benefits resulting from (i) certain increases in the tax basis of assets of EELP and its subsidiaries resulting from exchanges of EELP partnership interests in the future, (ii) certain tax attributes of EELP and subsidiaries of EELP (including the existing tax basis of assets owned by EELP or its subsidiaries and the tax basis of certain assets purchased from the Foundation) that existed as of the time of the IPO or may exist at the time when Class B interests of EELP are exchanged for shares of Class A Common Stock, and (iii) certain other tax benefits related to us entering into the TRA, including tax benefits attributable to payments that we make under the TRA. See “Certain Relationships and Related Person Transactions—Related Person Transactions—Transactions in Connection with our Reorganization and Initial Public Offering—Tax Receivable Agreement” in our Proxy Statement on DEF 14A filed on April 16, 2024.

The payments that we will be required to make under the TRA, including those made if we elect to terminate the agreement early, have the potential to be substantial. Based on certain assumptions, including no material changes in the relevant tax law and that we earn sufficient taxable income to realize the full tax benefits that are the subject of the TRA, we expect that future payments to the TRA Beneficiaries (not including Excelerate) will equal $62.1 million in the aggregate, although the actual future payments to the TRA Beneficiaries will vary based on the factors discussed in “Certain Relationships and Related Person Transactions—Related Person Transactions—Transactions in Connection with our Reorganization and Initial Public Offering—Tax Receivable Agreement” in our Proxy Statement on DEF 14A filed on April 16, 2024. In addition, payments we make under the TRA will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return. Estimating the amount of payments that may be made under the TRA is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors and future events.

For the years ended December 31, 2024 and 2023, we made payments under the TRA of $4.0 million and $3.4 million, respectively. The TRA payment forecasted to be made in 2025 as of December 31, 2024, is $3.1 million. If EE Holdings were to have exchanged all of its EELP interests as of the balance sheet date, we would recognize a liability for payments under the TRA of approximately $433.4 million, assuming (i) that EE Holdings exchanged all of its EELP interests using our December 31, 2024 closing market price of $30.25 per share of Class A Common Stock, (ii) no material changes in relevant tax law, (iii) a constant combined effective income tax rate of 21.0% and (iv) that we have sufficient taxable income in each year to realize on a current basis the increased depreciation, amortization and other tax benefits that are the subject of the TRA. The actual future payments to the TRA Beneficiaries will vary, and estimating the amount and timing of payments that may be made under the TRA is by its nature imprecise, as the calculation of amounts payable depends on a variety of factors and future events. As a result of the Share Repurchase Program, our expected payments under the TRA decreased by $7.0 million in 2024. We expect to receive distributions from EELP in order to make any required payments under the TRA. Any distributions that EELP makes to us will generally require EELP to make distributions to the other owners of EELP pro rata based on ownership of EELP interests. To the extent such distributions or our cash resources are insufficient to meet our obligations under the TRA as result of timing discrepancies or otherwise, we may need to incur debt to finance payments under the TRA.

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LNG purchase and sale commitments

In February 2023, we executed a 20-year LNG sale and purchase agreement (“SPA”) with Venture Global LNG. Under the agreement, we will purchase 0.7 MTPA of LNG on a free-on-board basis from the Plaquemines Phase 2 LNG facility in Plaquemines Parish, Louisiana. Our purchase commitment will be based on the final settlement price of monthly Henry Hub natural gas futures contracts plus a contractual spread. The start of this commitment, however, is dependent on the second phase of the LNG facility becoming operational, which is not expected in the next 12 months.

In November 2023, we signed a 15-year SPA with Bangladesh Oil, Gas & Mineral Corporation (“Petrobangla”). Under the agreement, Petrobangla has agreed to purchase LNG from us beginning in 2026. We will deliver 0.85 MTPA of LNG in 2026 and 2027 and 1.0 MTPA from 2028 to 2040. The take-or-pay LNG volumes are expected to be delivered through our two existing FSRUs in Bangladesh, Excellence and Summit LNG, on a Delivery ex-Ship basis.

In January 2024, we executed a 15-year SPA with QatarEnergy. Under the agreement, we have agreed to purchase LNG from QatarEnergy beginning in 2026. QatarEnergy will deliver 0.85 MTPA of LNG in 2026 and 2027 and 1.0 MTPA from 2028 to 2040. Our purchase commitment will be based on a three-month average of Brent Crude prices for the months immediately preceding each delivery, multiplied by a fixed percentage. These LNG volumes are intended to be used to supply sales under the SPA we have with Petrobangla.

In the third quarter of 2024, we signed medium-term agreements for LNG purchases and sales in one of the Atlantic Basin regions in which we do business. Over the term of these agreements, we will purchase and sell approximately 0.65 million tonnes of LNG, the pricing of which will be based on TTF. The first purchase under these agreements was made during the fourth quarter of 2024.

The following table presents our future contractual obligations as of December 31, 2024 (in thousands):

Critical Accounting Policies and Estimates

The accounting policies and estimates discussed below are considered by management to be critical to an understanding of our financial statements as their application requires the most significant judgments from management in estimating matters for financial reporting that are inherently uncertain. For additional information about our accounting policies and estimates, see the Note 2 – Summary of significant accounting policies to the Consolidated Financial Statements.

Leases

We account for leases under the provisions of ASC 842. In the application of ASC 842 for leases in which we are the lessee, certain estimates and management judgments are required such as determining the useful life of a leased asset, the discount rate used in calculating the present value of lease payments, and when leases have extension or termination options that are likely to be exercised. When we are the lessor, estimates are required in allocating the contract consideration between the lease component and non-lease components on a relative standalone selling price basis.

Lessee Accounting

As of the lease commencement date, we recognize a liability for our lease obligation, initially measured at the present value of lease payments not yet paid, and an asset for our right to use the underlying asset, initially measured equal to the lease liability and adjusted for lease payments made at or before lease commencement, lease incentives, and any initial direct costs. The discount rate used to determine the present value of the lease payments is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment.

The initial recognition of the lease obligation and right-of-use asset excludes short-term leases. Short-term leases are leases with an original term of one year or less, excluding those leases with an option to extend the lease for greater than one year or an option to purchase the underlying asset that the lessee is deemed reasonably certain to exercise. We have elected, as an accounting policy, not to apply the recognition requirements to short-term leases. Instead, we may recognize the lease payments in the statements of income on a straight-line basis over the lease term.

We have certain lease agreements that provide for the option to extend or terminate early, which was evaluated on each lease to arrive at the lease term. If we were reasonably certain to exercise a renewal or termination option, this period was factored into the lease

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term. As of December 31, 2024, we did not have any lease agreements with residual value guarantees or material restrictions or covenants.

Lessor Accounting

We determined that our time charter and terminal use contracts contain a lease and a performance obligation for the provision of time charter and other regasification services. Leases are classified based upon defined criteria either as sales-type, direct financing, or operating leases by the lessor.

For those leases classified as sales-type, the underlying asset is derecognized and the net investment in the lease is recorded. We have determined that these contracts contain a lease component for the use of the vessel and non-lease components relating to operation of the vessels. We have allocated the contract consideration between the lease component and non-lease components on a relative standalone selling price basis. We utilize a combination of approaches to estimate the standalone selling prices when the directly observable selling price is not available by utilizing information available such as market conditions and prices, entity-specific factors, and internal estimates when market data is not available. Given that there are no observable standalone selling prices for either of these two components, judgment is required in determining the standalone selling price of each component.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. New assets, modifications to existing assets which improve the asset’s operational efficiency, capacity or useful life, and our finance leases are assigned a useful life. Useful lives of property and equipment are determined using various assumptions, including our expected use of our assets and the supply of and demand for LNG and natural gas in the markets we serve, normal wear and tear of assets, and the expected extent and frequency of maintenance. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, less an estimated salvage value.

During the fourth quarter of 2023, we performed a review of the estimated useful lives of our FSRU vessels. As a relatively new asset class, being first built in 2005, we initially estimated a useful life of 30 years with no salvage value. As the vessels approach almost 20 years of life, there has been improved visibility into the expected term of FSRU productive capabilities, demand, and salvage potential. As a result, we changed the useful lives of our FSRU vessel assets to 40 years and added an estimated salvage value.

Asset retirement obligations (“ARO”)

We recognize liabilities for retirement obligations associated with tangible long-lived assets when there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The fair value of a liability for an ARO is recognized in the period which it is incurred, if a reasonable estimate of fair value can be made. In order to estimate the fair value, we use judgments and assumptions for factors including the existence of legal obligations for an ARO; technical assessments of the assets; discount rates; inflation rates; and estimated amounts and timing of settlements. The offsetting asset retirement cost is recorded as an increase to the carrying value of the associated property and equipment on the consolidated balance sheets and depreciated over the estimated useful life of the asset. In periods subsequent to the initial measurement of an ARO, we recognize period-to-period changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows.

Income taxes

We are a corporation for U.S. federal and state income tax purposes. EELP is treated as a pass-through entity for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax at the entity level. As part of our income tax accounting process, we are required to make certain assumptions and estimations.

We record valuation allowances to reflect the estimated amount of certain deferred tax assets that are more likely to not be realized. In making such a determination, we evaluate a variety of factors, including our operating history, accumulated deficit, and the existence of taxable or deductible temporary differences and reversal periods.

The effect of tax positions is recognized only if those positions are more likely than not of being sustained. Conclusions reached regarding tax positions are continually reviewed based on ongoing analyses of tax laws, regulations, and interpretations thereof. To the extent that our 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. We recognize the tax benefit from an uncertain tax provision only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the tax position.

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Tax receivable agreement

In connection with the IPO, we entered into the TRA with the TRA Beneficiaries. The TRA will provide for payment by us to the TRA Beneficiaries of 85% of the amount of the net cash tax savings, if any, that we are deemed to realize as a result of our utilization of certain tax benefits. The amount and timing of future payments to the TRA Beneficiaries will vary as the calculation depends on a variety of factors and future events. Potential future actions taking by us, such as mergers or other forms of business combinations that would constitute a change in control, may influence the timing and amount of payments we make under the TRA in a manner that does not correspond to our use of the corresponding tax benefits.

Recent Accounting Pronouncements

Refer to Note 2 – Summary of significant accounting policies to the notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for information regarding recently issued accounting pronouncements.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto included in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included in Item 1A of this Annual Report and our other filings with the SEC. Please also see the section titled “Forward-Looking Statements” in this Annual Report.

Overview

Excelerate is changing the way the world accesses cleaner and more reliable energy by delivering regasified natural gas, which benefits hundreds of millions of people around the world. From our founding, we have focused on providing flexible liquefied natural gas (“LNG”) solutions to markets in diverse environments across the globe, providing a lesser emitting form of energy to markets that often rely on coal as their primary energy source. At Excelerate, we believe that access to energy sources such as LNG is critical to assisting markets in their decarbonization efforts, while at the same time promoting economic growth and improving quality of life.

Our business spans the globe, with regional offices in 10 countries and operations in Argentina, Bangladesh, Brazil, Finland, Pakistan, the United Arab Emirates (“UAE”), and the United States. We are the largest provider of regasified LNG capacity in Argentina, Bangladesh, Finland and the UAE, one of the largest providers of regasified LNG capacity in Brazil and Pakistan, and we operate the largest floating storage and regasification unit (“FSRU”) in Brazil. We intend to continue marketing natural gas and LNG, both of which offer a cleaner energy source from which power can be generated consistently, in the markets where we operate. The high value our customers place on our services has resulted in a reliable source of revenues to us. For the year ended December 31, 2023, we generated revenues of $1,159.0 million, net income of $126.8 million and Adjusted EBITDA of $346.8 million. For the year ended December 31, 2022, we generated revenues of $2,473.0 million, net income of $80.0 million and Adjusted EBITDA of $296.4 million. For the year ended December 31, 2021 we generated revenues of $888.6 million, net income of $41.2 million and Adjusted EBITDA of $263.5 million. For more information regarding our non-GAAP measure Adjusted EBITDA and a reconciliation to net income, the most comparable U.S. Generally Accepted Accounting Principles (“GAAP”) measure, see “How We Evaluate Our Operations.”

Our business focuses on the integration of the natural gas-to-power LNG value chain, and as part of this value chain, we operate regasification terminals in global economies that utilize our FSRU fleet. Our business is substantially supported by time charter and terminal use contracts, which are effectively long-term, take-or-pay arrangements and provide consistent revenue and cash flow from our high-quality customer base. As of December 31, 2023, we operate a fleet of ten purpose-built FSRUs, have completed more than 2,700 ship-to-ship transfers of LNG with over 50 LNG operators since we began operations and have safely delivered more than 6,600 billion cubic feet of natural gas through 16 LNG regasification terminals. For the years ended December 31, 2023, 2022 and 2021, we generated revenues of $506.8 million, $445.2 million and $468.0 million, respectively, from our FSRU and terminal services businesses, representing approximately 44%, 18% and 53% of our total revenues for each of those periods.

We also procure LNG from major producers and sell natural gas through our flexible LNG terminals. For the years ended December 31, 2023, 2022 and 2021, we generated revenues of $652.2 million, $2,027.8 million and $420.5 million, respectively, from LNG and natural gas sales, representing approximately 56%, 82% and 47% of our total revenues for each of those periods. We believe that the commercial momentum that we have established in recent years and the increasing need for access to LNG around the world, have resulted in a significant portfolio of new growth opportunities for us to pursue. In addition to our FSRU and terminal services businesses and LNG and natural gas sales, we plan to expand our business through investments in organic and inorganic commercial opportunities. We are evaluating and pursuing early-stage projects with opportunities in Asia Pacific, Latin America, Europe, and the Middle East.

Recent Trends and Outlook

The need for energy security and base load natural gas supply around the world has never been more pressing and the importance of FSRUs has never been greater. The outage on the Finnish Balticconnector pipeline served as an example of this as the flow of natural gas was disrupted between Finland and the rest of Europe via Estonia. This was a clear indication of the importance of FSRUs as a source of energy security. Following the outage, Exemplar was the main source of natural gas into Finland as the country prepared for the winter months.

Natural gas and LNG prices increased during the fourth quarter of 2023 relative to the third quarter. Dutch Title Transfer Facility (TTF) and Japan Korea Marker (JKM) average fourth quarter pricing ($13.58/million British thermal units (“MMBtu”) and $15.75/MMBtu, respectively) increased compared to the third quarter ($10.75/MMBtu and $12.58/MMBtu, respectively), but remain over 50% lower than prices in the fourth quarter of 2022. EU natural gas storage levels began withdrawal season on November 1 at approximately 99.4% full, which exceeded the EU’s mandated target of 90%. A mild start to the winter and sufficient volumes in storage limited price escalation. Geopolitical risk premiums increased in the fourth quarter of 2023 due to the Israel-Hamas war. The spread of the conflict to Israel’s north and attacks by Yemen's Houthis on Red Sea vessels placed an increased risk on LNG shipping, leading

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vessels to transit the longer and costlier route around the Cape of Good Hope. Although LNG markets remain structurally short, dependent on season-to-season fundamentals, balanced global LNG supplies and normal seasonal demand are limiting price risk escalation. Steady LNG spot prices have benefited LNG consumers, allowing emerging buyers in South Asia to continue their spot cargo purchasing programs. If pricing does not significantly increase above recent levels, we expect to see continued opportunities to sell spot LNG cargos into the regions we serve.

In 2024, supply-side flexibility will continue to depend on end-of-season storage levels in Europe. Ending the season with storage levels below 50% of capacity could suggest tight natural gas supply during the summer of 2024 and price volatility. At the end of 2024, a take-or-pay five-year transit contract between Russia’s Gazprom and Ukraine’s Naftogaz will expire. Russia’s natural gas pipeline exports to Europe declined from an average of about 65.9 billion cubic meters in 2022 to 15.2 billion cubic meters in 2023. We believe it is unlikely that the contract will be renewed and Central and Eastern European consumers will have to rely on LNG imports or natural gas supplied from Western Europe, which faces constraints as the continent’s natural gas pipeline infrastructure was built to flow volumes east-to-west and not west-to-east. In addition, U.S. sanctions on Russia have impacted the Arctic LNG 2 export project. The three-train 19.8 million tonnes per annum (“MTPA”) liquefaction capacity project was scheduled to begin operations in 2024, reaching full capacity by 2026, but Novatek, the developer, declared force majeure because it was unable to obtain LNG supplies. In accordance with sanctions, TotalEnergies declared force majeure on its offtake contract in January 2024, while in December 2023, Japan’s Mitsui and Co. pulled its workers from the project. Removing 19.8 MTPA of LNG supply from global markets suggests incremental structural tightness over the next few years.

Longer term structural tightness could also be compounded by delays in U.S. Gulf of Mexico and Mexican LNG export projects. There are approximately 16 liquefaction projects with about 156 MTPA of LNG capacity pending final investment decision (“FID”) that are facing regulatory delays. On January 26, 2024, the Biden Administration announced a temporary pause on pending decisions of new LNG export authorizations to non-Free Trade Agreement (“non-FTA”) countries until after the 2024 presidential elections, effectively delaying approvals until 2025. The pause comes amidst rising costs and labor shortages for LNG projects, which could impact project financing effectively leading to cancellation of certain LNG projects. If the proposed projects have delayed FIDs, thereby pushing in-service dates to the end of this decade, or do not move ahead at all, the structural supply constraints could be prolonged. Excelerate signed an agreement to purchase up to 0.7 MTPA of LNG from Venture Global’s Plaquemines Phase 2 LNG facility, which has taken FID, is under construction and has non-FTA permits in place and therefore is not expected to be affected by the temporary pause. Together with Excelerate’s additional LNG purchase commitments from QatarEnergy, we expect that our portfolio will give us the opportunity to assist both new and existing customers in better managing the typical uncertainties of local demand, while capturing potential arbitrage opportunities ourselves.

Recent Business Updates and 2023 in Review:

•
In January 2024, Excelerate signed a 15-year LNG sale and purchase agreement (“SPA”) with QatarEnergy. Under the agreement, Excelerate has agreed to purchase LNG from QatarEnergy on a delivered ex-ship basis, beginning in January 2026. Excelerate will purchase 0.85 MTPA of LNG in 2026 and 2027 and 1.0 MTPA from 2028 to 2040. The LNG deliveries are expected to provide reliable LNG supply for Excelerate’s previously announced SPA with Petrobangla in Bangladesh.

•
In November 2023, Excelerate signed a 15-year SPA with Bangladesh Oil, Gas & Mineral Corporation (“Petrobangla”). Under the agreement, Petrobangla has agreed to purchase LNG from Excelerate beginning in 2026. Excelerate will deliver 0.85 MTPA of LNG in 2026 and 2027 and 1.0 MTPA from 2028 to 2040. The take-or-pay LNG volumes are expected to be delivered through Excelerate’s two existing FSRUs, Excellence and Summit LNG, in Bangladesh.

•
In October 2023, Excelerate executed a 10-year time charter party (“TCP”) agreement with Petróleo Brasileiro S.A. (“Petrobras”) for Sequoia. The contract commenced on January 1, 2024 and the vessel will be primarily located at the LNG terminal in Salvador, Bahia, Brazil (the “Bahia Terminal”). This long-term, fixed fee agreement replaces the previous gas sales agreement between Excelerate and Petrobras.

•
In September 2023, Excelsior resumed its original charter with the Government of the Federal Republic of Germany (the “German government”). In February 2023, Excelsior commenced its charter hire pursuant to a binding five-year charter contract signed with the German government to provide regasification services at Germany’s planned LNG import terminal that is being developed by Tree Energy Solutions, E.ON SE and ENGIE SA. From April 2023 through August 2023, Excelsior was on temporary suspension from the Germany charter while it was deployed to the Bahia Blanca GasPort terminal in Argentina from May 2023 through August 2023.

•
In the second and third quarters of 2023, Excelerate delivered four spot LNG cargos into Bangladesh, equating to approximately 250,000 tons of LNG.

•
In April 2023, we completed the purchase of Sequoia for a purchase price of $265.0 million from Anemoesa Marine Inc. (“Anemoesa”). Proceeds from our Term Loan Facility (as defined herein) and cash on hand were used to purchase Sequoia. Prior to the purchase, we had leased Sequoia on a five-year bareboat charter from Anemoesa, which began in June 2020.

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•
In March 2023, we closed on an amended and restated $600.0 million senior secured credit facility, consisting of a $350.0 million revolving credit facility and a $250.0 million term loan. The term loan was drawn with proceeds used to purchase the Sequoia FSRU in April 2023. The new facilities refinanced our existing EE Revolver (as defined herein). In December 2023, we repaid $55.2 million of the principal outstanding on the term loan.

•
In February 2023, we extended our TCP agreement with Dubai Supply Authority for Explorer. Under the terms of the new agreement, the time charter period has been extended by an additional five years, which will now reach completion in the first quarter of 2031.

•
In February 2023, we executed a 20-year SPA with Venture Global LNG under which we will purchase 0.7 MTPA of LNG on an free-on-board basis from the Plaquemines Phase 2 LNG facility in Plaquemines Parish, Louisiana. The start of this commitment is dependent on the LNG facility becoming operational.

Components of Our Results of Operations

Revenue

We generate revenue through the provision of regasification services using our fleet of FSRUs and LNG terminal assets, as well as physical sales of LNG and natural gas, that are made primarily in connection with our regasification and terminal projects. We provide regasification services through time charters and operation service contracts primarily related to our long-term charter and terminal use contracts. Most of our time charter revenues are from long-term contracts that function similarly to take-or-pay arrangements in that we are paid if our assets and teams are available and ready to provide services to our customers regardless of whether our customers utilize the services. The portion of our revenue attributable to our charters for the use of our vessels is accounted for as lease revenue, and the revenues attributable to the services provided under those charters are accounted for as non-lease revenue. We generally charge fixed fees for the use of and services provided with our vessels and terminal capacity plus additional amounts for certain variable costs.

Expenses

The principal expenses involved in conducting our business are operating costs, direct cost of gas sales, general and administrative expenses, and depreciation and amortization. A large portion of the fixed and variable costs we incur in our business are in the operation of our fleet of FSRUs and terminals that provide regasification and gas supply to our customers. We manage the level of our fixed costs based on several factors, including industry conditions and expected demand for our services and generally pass-through certain variable costs.

We incur significant equipment costs in connection with the operation of our business, including capital equipment recorded as property and equipment, net on our balance sheets and related depreciation and amortization on our income statement. In addition, we incur repair and maintenance and leasing costs related to our property and equipment utilized both in our FSRU and terminal services and gas sales. Property and equipment and other assets include costs incurred for our fleet of FSRUs and terminal assets, including capitalized costs related to drydocking activities. Generally, we are required to drydock each of our vessels every five years, but vessels older than 15 years of age require a shorter duration drydocking or in place bottom survey every two and a half years.

Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses include the following major cost categories: vessel operating costs; personnel costs; repair and maintenance; and leasing costs. These operating costs are incurred for both our FSRU and terminal services revenues and gas sales revenues.

Direct cost of gas sales

Direct cost of gas sales includes the cost of LNG and other fuel and direct costs incurred in selling natural gas and LNG, which are significant variable operating costs. These costs fluctuate in proportion to the amount of our natural gas and LNG sales as well as LNG prices.

Depreciation and amortization expenses

Depreciation expense is recognized on a straight-line basis over the estimated useful lives of our property and equipment assets, less an estimated salvage value. Certain recurring repairs and maintenance expenditures required by regulators are amortized over the required maintenance period.

Selling, general and administrative expenses

Selling, general and administrative expenses (“SG&A”) consist primarily of compensation and other employee-related costs for personnel engaged in executive management, sales, finance, legal, tax and human resources. SG&A also consists of expenses associated

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with office facilities, information technology, external professional services, business development, legal costs and other administrative expenses.

Restructuring, transition and transaction expenses

We incurred restructuring, transition and transaction expenses related to consulting, legal, and audit costs incurred as part of and in preparation for our IPO.

Other income, net

Other income, net, primarily contains interest income, gains or losses from the effect of foreign exchange rates and gains and losses on asset sales.

Interest expense and Interest expense – related party

Our interest expense is primarily associated with our finance leases liabilities and loan agreements with external banks and related parties.

Earnings from equity-method investment

Earnings from equity-method investment relate to our 45% ownership interest in the joint venture with Nakilat Excelerate LLC (“Nakilat JV”), which we acquired in 2018.

Provision for income taxes

Excelerate is a corporation for U.S. federal and state income tax purposes. Excelerate’s accounting predecessor, Excelerate Energy Limited Partnership (“EELP”), is treated as a pass-through entity for U.S. federal income tax purposes and, as such, has generally not been subject to U.S. federal income tax at the entity level. Instead, EELP’s U.S. income is allocated to its Class A and Class B partners proportionate to their interest. Accordingly, our provision for income taxes includes U.S. taxes incurred at the Excelerate corporate level beginning in April 2022. In addition, EELP has international operations that are subject to foreign income tax and U.S. corporate subsidiaries subject to U.S. federal tax. These taxes are also included in our provision for income taxes.

Net income (loss) attributable to non-controlling interest

Net income (loss) attributable to non-controlling interests includes earnings allocable to our shares of Class B Common Stock as well as earnings allocable to the third-party equity ownership interests in our subsidiary, Excelerate Energy Bangladesh, LLC.

Net income (loss) attributable to non-controlling interest – ENE Onshore

Net income (loss) attributable to non-controlling interest – ENE Onshore includes the earnings allocable to the equity ownership interests in Excelerate New England Onshore, LLC (“ENE Onshore”). On October 17, 2022, EE Holdings, the indirect sole member of ENE Onshore, and EELP, the sole member of Excelerate New England Lateral, LLC (“ENE Lateral”), entered into a merger agreement, pursuant to which ENE Onshore was merged with and into ENE Lateral (the “ENE Onshore Merger”), effective October 31, 2022. ENE Lateral was the surviving entity and ENE Onshore ceased to exist as a separate entity. Prior to the ENE Onshore Merger, Excelerate consolidated ENE Onshore as a variable interest entity as Excelerate was determined to be the primary beneficiary of ENE Onshore. As a result of the ENE Onshore Merger, Excelerate ceased to have a non-controlling interest related to ENE Onshore.

Factors Affecting the Comparability of Our Results of Operations

As a result of a number of factors, our historical results of operations may not be comparable from period to period or going forward. Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations.

Impact of the Reorganization

Following the completion of the IPO in April 2022, we are a corporation for U.S. federal and state income tax purposes. EELP is treated as a pass-through entity for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax at the entity level. Accordingly, unless otherwise specified, our historical results of operations prior to the IPO do not include provision for U.S. federal income tax for EELP. The reorganization undertaken in connection with the IPO, as described under “Organizational Structure—The Reorganization” in our prospectus (the “Prospectus”), dated April 12, 2022 and filed on April 14, 2022 with the SEC pursuant to Rule 424(b)(4) under the Securities Act (the “Reorganization”), was accounted for as a reorganization of entities under common control. As a result, our consolidated financial statements recognized the assets and liabilities received in the Reorganization at their historical carrying amounts, as reflected in the historical consolidated financial statements of EELP. In addition, in connection with the Reorganization and the IPO, we entered into the Tax Receivable Agreement (the “TRA”) with Excelerate Energy Holdings, LLC (“EE Holdings”) and the George Kaiser Family Foundation (the “Foundation”) (or their affiliates) (together, the “TRA Beneficiaries”) pursuant to which we will be required to pay the TRA Beneficiaries 85% of the net cash savings, if any, that we are

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deemed to realize as a result of our utilization of certain tax benefits described under “Certain Relationships and Related Person Transactions—Related Person Transactions—Transactions in Connection with our Reorganization and Initial Public Offering—Tax Receivable Agreement” in our Proxy Statement on DEF 14A filed on April 17, 2023.

Also included in the Reorganization is our acquisition of all of the issued and outstanding membership interests in Excelsior, LLC and FSRU Vessel (Excellence), LLC (f/k/a Excellence, LLC) (collectively, the “Foundation Vessels”). The acquisition of Excelsior, LLC was accounted for as an acquisition of property and equipment at the completion of the Reorganization. The Foundation Vessels had historically been accounted for as finance leases in our historical financial statements. In 2018, EELP entered into an agreement with a customer to lease Excellence with the vessel transferring ownership to the customer at the conclusion of the agreement for no additional consideration. Historically, EELP, as a lessor, has accounted for Excellence contract with our customer as a sales-type lease in the consolidated balance sheet in accordance with Accounting Standards Codification 842, Leases. Excellence continues to be accounted for as a sales-type lease and thus did not result in an adjustment to property and equipment.

Public Company Costs

We have incurred incremental, non-recurring costs related to our transition to a publicly traded corporation, including the costs of the IPO and the costs associated with the initial implementation of our Sarbanes-Oxley Section 404 internal control reviews and testing. We also continue to incur significant and recurring expenses as a publicly traded corporation, including costs associated with compliance under the Exchange Act, annual and quarterly reports to common stockholders, registrar and transfer agent fees, national stock exchange fees, audit fees, incremental director and officer liability insurance costs and director and officer compensation.

Depreciation Expense

During the fourth quarter of 2023, we performed a review of the estimated useful lives of our FSRU vessels. As a relatively new asset class, being first built in 2005, we initially estimated a useful life of 30 years with no salvage value. As the vessels approach almost 20 years of life, there has been improved visibility into the expected term of FSRU productive capabilities, demand, and salvage potential. As a result, we changed the useful lives of our FSRU vessel assets to 40 years and added an estimated salvage value.

How We Evaluate Our Operations

We operate in a single reportable segment. However, we use a variety of qualitative, operational and financial metrics to assess our performance and valuation. Among other measures, management considers each of the following in assessing our business:

Adjusted Gross Margin;

Adjusted EBITDA; and

Capital Expenditures.

Adjusted Gross Margin

We use Adjusted Gross Margin, a non-GAAP financial measure, which we define as revenues less direct cost of sales and operating expenses, excluding depreciation and amortization, to measure our operational financial performance. Management believes Adjusted Gross Margin is useful because it provides insight on profitability and true operating performance excluding the implications of the historical cost basis of our assets. Our computation of Adjusted Gross Margin may not be comparable to other similarly titled measures of other companies, and you are cautioned not to place undue reliance on this information.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure included as a supplemental disclosure because we believe it is a useful indicator of our operating performance. We define Adjusted EBITDA as net income before interest expense, income taxes, depreciation and amortization, accretion, non-cash long-term incentive compensation expense and items such as charges and non-recurring expenses that management does not consider as part of assessing ongoing operating performance. In the first quarter of 2023, we revised the definition of Adjusted EBITDA to adjust for the impact of non-cash accretion expense, which results in a metric that is consistent with how management will review performance going forward. Management believes accretion expense does not directly reflect our ongoing operating performance.

We adjust net income for the items listed above to arrive at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. This measure has limitations as certain excluded items are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our results will be unaffected

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by unusual or non-recurring items. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. For the foregoing reasons, Adjusted EBITDA has significant limitations that affect its use as an indicator of our profitability and valuation, and you are cautioned not to place undue reliance on this information.

Capital Expenditures

We incur capital expenditures as part of our regular business operations. Capital expenditures are costs incurred to expand our business operations, increase the efficiency of business operations, extend the life of an existing asset, improve an asset’s capabilities, increase the future service of an asset, repair existing assets in order to maintain their service capability, and provide the upkeep required for regulatory compliance. Costs related to prospective projects are capitalized once it is determined to be probable that the related assets will be constructed.

The tables below reconcile the financial measures discussed above to the most directly comparable financial measure calculated and presented in accordance with GAAP:

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Consolidated Results of Operations

Years Ended December 31, 2023, 2022 and 2021

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Net income

Net income was $126.8 million for the year ended December 31, 2023, an increase of $46.8 million, as compared to $80.0 million for the year ended December 31, 2022. Net income was higher primarily due to new charters in Finland and Germany, and higher rates on charters in Brazil, Argentina and the UAE, partially offset by the end of our contract in Israel in the fourth quarter of 2022 ($41.0 million), lower operating lease expense due to the acquisition of Sequoia ($22.4 million), the early extinguishment of the Excellence finance lease liability as part of the vessel acquisition ($21.8 million), higher interest income received on cash balances invested in money market funds ($17.3 million), higher direct margin earned on gas sales in Brazil, Finland and Bangladesh during the year ended December 31, 2023 ($133.8 million), which exceeded direct margin earned on gas sales that occurred in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), less interest expense – related party incurred in the year ended December 31, 2023 due to the acquisition of the Foundation Vessels ($7.9 million), improved utilization resulting in lower idle vessel costs in 2023 ($7.7 million), lower restructuring, transition and transaction expenses after the completion of our IPO in April 2022 ($6.9 million), and one of our vessels coming off of suspension in the second quarter of 2022 ($5.6 million), partially offset by an increase in SG&A expenses ($21.4 million), as discussed below, the drydocking of one of our vessels, Excellence, that is accounted for as a sales-type lease ($20.3 million), an increase in interest expense ($18.5 million), primarily due to the new Term Loan Facility, extended

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commissioning time for our power barge assets in Albania ($8.7 million), an increase in depreciation and amortization ($8.3 million), primarily as a result of acquiring Sequoia and Excelsior in the second quarters of 2023 and 2022, respectively, an increase in operating personnel costs ($6.7 million), increases in repairs and maintenance ($5.0 million), and an increase in the provision for income taxes ($4.9 million), as discussed below.

Gross Margin and Adjusted Gross Margin

Gross Margin was $298.1 million for the year ended December 31, 2023, an increase of $38.4 million, as compared to $259.7 million for the year ended December 31, 2022. For the year ended December 31, 2023, Adjusted Gross Margin was $412.4 million, an increase of $55.4 million, as compared to $357.0 million for the year ended December 31, 2022. Gross Margin and Adjusted Gross Margin were higher primarily due to new charters in Finland and Germany, and higher rates on charters in Brazil, Argentina and the UAE, partially offset by the end of our contract in Israel in the fourth quarter of 2022 ($41.0 million), lower operating lease expense due to the acquisition of Sequoia ($22.4 million), higher direct margin earned on gas sales in Brazil, Finland and Bangladesh during the year ended December 31, 2023 ($133.8 million), which exceeded direct margin earned on gas sales that occurred in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), improved utilization resulting in lower idle vessel costs in 2023 ($7.7 million), and one of our vessels coming off of suspension in the second quarter of 2022 ($5.6 million), partially offset by the drydocking of one of our vessels, Excellence, that is accounted for as a sales-type lease ($20.3 million), an increase in operating personnel costs ($6.7 million) and increases in repairs and maintenance ($5.0 million). The increase in Gross Margin was also offset by extended commissioning time for our power barge assets in Albania ($8.7 million) and an increase in depreciation and amortization expense ($8.3 million), primarily as a result of acquiring Sequoia and Excelsior in the second quarters of 2023 and 2022, respectively.

Adjusted EBITDA

Adjusted EBITDA was $346.8 million for the year ended December 31, 2023, an increase of $50.4 million, as compared to $296.4 million for the year ended December 31, 2022. Adjusted EBITDA was higher primarily due to new charters in Finland and Germany, and higher rates on charters in Brazil, Argentina and the UAE, partially offset by the end of our contract in Israel in the fourth quarter of 2022 ($41.0 million), lower operating lease expense due to the acquisition of Sequoia ($22.4 million), higher interest income received on cash balances invested in money market funds ($17.3 million), higher direct margin earned on gas sales in Brazil, Finland and Bangladesh during the year ended December 31, 2023 ($133.8 million), which exceeded direct margin earned on gas sales that occurred in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), improved utilization resulting in lower idle vessel costs in 2023 ($7.7 million), and one of our vessels coming off of suspension in the second quarter of 2022 ($5.6 million), partially offset by an increase in SG&A expenses ($21.4 million), as discussed below, the drydocking of one of our vessels, Excellence, that is accounted for as a sales-type lease ($20.3 million), an increase in operating personnel costs ($6.7 million) and increases in repairs and maintenance ($5.0 million).

For more information regarding our non-GAAP measures Adjusted Gross Margin and Adjusted EBITDA, and a reconciliation to their most comparable GAAP measures, see “—How We Evaluate Our Operations.”

FSRU and terminal services revenues

FSRU and terminal services revenues were $506.8 million for the year ended December 31, 2023, an increase of $61.6 million as compared to $445.2 million for the year ended December 31, 2022. FSRU and terminal services revenues were higher primarily due to the Exemplar charter beginning in Finland in the fourth quarter of 2022, seasonal service by Excelsior in Argentina before redelivery to Germany at the end of the third quarter of 2023, and higher daily rates in Brazil, Argentina and the UAE, partially offset by the end of our contract with Israel in the fourth quarter of 2022.

Gas sales revenues

Gas sales revenues were $652.2 million for the year ended December 31, 2023, a decrease of $1,375.6 million, as compared to $2,027.8 million for the year ended December 31, 2022. The decrease was primarily due to a reduction of natural gas sales volumes and prices related to our terminal operations in Brazil and of LNG sales at our terminal in New England during the year ended December 31, 2022, partially offset by an increase in LNG sales in Bangladesh during the year ended December 31, 2023.

Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses was $228.2 million for the year ended December 31, 2023, an increase of $19.0 million, as compared to $209.2 million for the year ended December 31, 2022. The increase in cost of revenue and vessel operating expenses was primarily due to drydock costs on Excellence, higher repairs and maintenance on our other vessels, personnel costs and positioning costs associated with seasonal service in Argentina, partially offset by lower operating lease expense due to the acquisition of Sequoia, and improved utilization resulting in lower idle vessel costs in 2023.

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Direct cost of gas sales

Direct cost of gas sales was $518.4 million for the year ended December 31, 2023, a decrease of $1,388.4 million, as compared to $1,906.8 million for the year ended December 31, 2022. The decrease was primarily due to a reduction of natural gas sales volumes related to our terminal operations in Brazil and of LNG sales at our terminal in New England during the year ended December 31, 2022, partially offset by LNG sales in Bangladesh during the year ended December 31, 2023.

Depreciation and amortization expenses

Depreciation and amortization expenses were $114.3 million for the year ended December 31, 2023, an increase of $17.0 million, as compared to $97.3 million for the year ended December 31, 2022. Depreciation and amortization increased primarily due to the acquisition of Sequoia in the second quarter of 2023, extended commissioning time for our power barge assets in Albania, and accelerated depreciation recognized for assets removed from service on one of our vessels in the second quarter of 2023, partially offset by a decrease due to the update to our useful life assumptions.

Selling, general and administrative expenses

Selling, general and administrative expenses were $87.5 million for the year ended December 31, 2023, an increase of $21.4 million, as compared to $66.1 million for the year ended December 31, 2022. The increase was primarily due to incremental costs incurred in conjunction with our transition to a publicly traded company, expenses related to new contracts in Europe, and additional business development activities.

Restructuring, transition and transaction expenses

We had no restructuring, transition and transaction expenses for the year ended December 31, 2023. Restructuring, transition and transaction expenses relating to the completion of our IPO in April 2022 were $6.9 million for the year ended December 31, 2022.

Interest expense

Interest expense was $52.5 million for the year ended December 31, 2023, an increase of $18.6 million, as compared to $33.9 million for the year ended December 31, 2022. Interest expense increased primarily due to the new Term Loan Facility (as defined herein), accelerated amortization of deferred issuance costs related to the Amended Credit Agreement, and increases in London Interbank Offered Rate (“LIBOR”) and the Secured Overnight Financing Rate (“SOFR”) rates, partially offset by lower balances remaining on our finance leases and long-term debt.

Interest expense – related party

Interest expense – related party was $14.5 million for the year ended December 31, 2023, a decrease of $11.1 million, as compared to $25.6 million for the year ended December 31, 2022. Interest expense decreased primarily due to the acquisition of the Foundation Vessels in the second quarter of 2022.

Early extinguishment of lease liability on vessel acquisition

In the year ended December 31, 2022, we incurred a $21.8 million expense as a result of the difference between the consideration given to acquire Excellence and the historical finance lease liability.

Other income, net

Other income, net was $15.6 million for the year ended December 31, 2023, an increase of $15.3 million as compared to $0.3 million for the year ended December 31, 2022. The increase was primarily due to higher interest income received on cash balances invested in money market funds and lower foreign currency exchange losses related to our operations in Brazil.

Provision for income taxes

The provision for income taxes for the years ended December 31, 2023 and 2022 was $33.2 million and $28.3 million, respectively. The increase was primarily attributable to the year-over-year change in the geographical distribution of income.

The effective tax rate for the years ended December 31, 2023 and 2022 was 20.8% and 26.1%, respectively. The decrease was primarily driven by the geographical distribution of income and the varying tax regimes of jurisdictions. Our 2022 effective tax rate was also impacted by the reduction of income before tax due to the loss on early extinguishment of the lease liability on acquisition of Excellence without a corresponding tax benefit, which increased our effective tax rate by 4.2% for the year ended December 31, 2022.

Excelerate is a corporation for U.S. federal and state income tax purposes. Excelerate’s accounting predecessor, EELP, is treated as a pass-through entity for U.S. federal income tax purposes and, as such, has generally not been subject to U.S. federal income tax at

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the entity level. Accordingly, unless otherwise specified, our historical results of operations prior to the IPO do not include any provision for U.S. federal income tax for EELP.

The Company has international operations that are also subject to foreign income tax and U.S. corporate subsidiaries subject to U.S. federal tax. Therefore, our effective income tax rate is dependent on many factors, including the Company’s geographical distribution of income, a rate benefit attributable to the portion of the Company’s earnings not subject to corporate level taxes, and the impact of nondeductible items and foreign exchange impacts as well as varying tax regimes of jurisdictions. In one jurisdiction, the Company’s tax rate is significantly less than the applicable statutory rate as a result of a tax holiday that was granted. This tax holiday will expire in 2033 at the same time that our contract and revenue with our customer ends.

Net income attributable to non-controlling interest

Net income attributable to non-controlling interest was $96.4 million for the year ended December 31, 2023, an increase of $41.3 million, as compared to $55.1 million for the year ended December 31, 2022. The increase in net income attributable to non-controlling interest was primarily due to higher net income and the addition of non-controlling interest related to owners of our Class B Common Stock after our IPO.

Net loss attributable to non-controlling interest – ENE Onshore

Net loss attributable to non-controlling interest – ENE Onshore was $1.4 million for the year ended December 31, 2022. In October 2022, ENE Onshore merged with and into ENE Lateral.

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Net income

Net income was $80.0 million for the year ended December 31, 2022, an increase of $38.8 million, as compared to $41.2 million for the year ended December 31, 2021. Net income was higher primarily due to direct margin earned on gas sales in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), which exceeded direct margin earned on gas sales that occurred in Bangladesh, China and Brazil during the year ended December 31, 2021 ($30.0 million), less interest expense – related party incurred in the year ended December 31, 2022 due to the acquisition of the Foundation Vessels ($21.1 million), less depreciation expense ($7.6 million), as discussed below, lower restructuring, transition and transaction expenses after the completion of our IPO in April 2022 ($7.1 million), and higher interest income received on cash balances invested in money market funds ($4.4 million), partially offset by fewer opportunities to sub-charter our available vessels to third parties during the year ended December 31, 2022 ($27.8 million), the early extinguishment of the Excellence finance lease liability as part of the vessel acquisition ($21.8 million), an increase in SG&A expenses ($19.0 million), as discussed below, increases in cost of revenue and vessel operating expenses ($16.5 million), primarily due to the commencement of the Bahia Terminal lease in the fourth quarter of 2021, foreign currency exchange losses ($7.2 million), and an increase in provision for income taxes ($7.2 million), as discussed below.

Gross Margin and Adjusted Gross Margin

Gross Margin was $259.7 million for the year ended December 31, 2022, an increase of $59.3 million, as compared to $200.4 million for the year ended December 31, 2021. Adjusted Gross Margin was $357.0 million for the year ended December 31, 2022, an increase of $51.7 million, as compared to $305.3 million for the year ended December 31, 2021. Gross Margin and Adjusted Gross Margin were higher primarily due to direct margin earned on gas sales in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), which exceeded direct margin earned on gas sales that occurred in Bangladesh, China and Brazil during the year ended December 31, 2021 ($30.0 million), partially offset by fewer opportunities to sub-charter our available vessels to third parties during the year ended December 31, 2022 ($27.8 million) and increases in cost of revenue and vessel operating expenses ($16.5 million), primarily due to the commencement of the Bahia Terminal lease in the fourth quarter of 2021. Gross Margin was also higher due to less depreciation expense ($7.6 million), as discussed below.

Adjusted EBITDA

Adjusted EBITDA was $296.4 million for the year ended December 31, 2022, an increase of $32.9 million, as compared to $263.5 million for the year ended December 31, 2021. Adjusted EBITDA was higher primarily due to direct margin earned on gas sales in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), which exceeded direct margin earned on gas sales that occurred in Bangladesh, China and Brazil during the year ended December 31, 2021 ($30.0 million), and higher interest income received on cash balances invested in money market funds ($4.4 million), partially offset by fewer opportunities to sub-charter our available vessels to third parties during the year ended December 31, 2022 ($27.8 million), an increase in SG&A expenses ($19.0 million), as discussed below, increases in cost of revenue and vessel operating expenses ($16.5 million), primarily due to the commencement of the Bahia Terminal lease in the fourth quarter of 2021, and foreign currency exchange losses ($7.2 million).

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For more information regarding our non-GAAP measures Adjusted Gross Margin and Adjusted EBITDA, and a reconciliation to their most comparable GAAP measures, see “—How We Evaluate Our Operations.”

FSRU and terminal services revenues

FSRU and terminal services revenues were $445.2 million for the year ended December 31, 2022, a decrease of $22.8 million, as compared to $468.0 million for the year ended December 31, 2021. FSRU and terminal services revenues were lower primarily due to fewer opportunities to sub-charter our available vessels to third parties during the first quarter of 2022, partially offset by benefits of the Exemplar lease beginning with Gasgrid Finland in the fourth quarter of 2022.

Gas sales revenues

Gas sales revenues were $2,027.8 million for the year ended December 31, 2022, an increase of $1,607.3 million, as compared to $420.5 million for the year ended December 31, 2021. The gas sales that occurred in the year ended December 31, 2022 related to our terminal operations in Brazil, Finland and New England, which exceeded gas sales to customers in Bangladesh, China and Brazil during the year ended December 31, 2021. Operations at the Bahia Terminal in Brazil began in December 2021, while operations at the Inkoo Terminal in Finland began in December 2022.

Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses was $209.2 million for the year ended December 31, 2022, an increase of $16.5 million, as compared to $192.7 million for the year ended December 31, 2021. The increase in cost of revenue and vessel operating expenses was primarily due to the additional cost of operations in Brazil as we began operations at the Bahia Terminal during the fourth quarter of 2021 ($19.4 million), which includes an increase in vessel and infrastructure rent expense ($7.2 million), as well as higher reimbursable local crewing costs in Argentina ($4.9 million), and higher maintenance at one of our terminal locations ($3.9 million), partially offset by decreased fuel and positioning costs ($11.7 million), which were higher in 2021 as part of servicing increased sub-charters.

Direct cost of gas sales

Direct cost of gas sales was $1,906.8 million for the year ended December 31, 2022, an increase of $1,516.3 million, as compared to $390.5 million for the year ended December 31, 2021. The increase was primarily due to gas sales that occurred in the year ended December 31, 2022 related to our terminal operations in Brazil, Finland and New England, partially offset by costs related to gas sales in Bangladesh, China and Brazil during the year ended December 31, 2021.

Depreciation and amortization expenses

Depreciation and amortization expenses were $97.3 million for the year ended December 31, 2022, a decrease of $7.6 million, as compared to $104.9 million for the year ended December 31, 2021. Depreciation and amortization decreased primarily due to the release of our one conventional LNGCs that was on a finance lease from short term charter operations in December 2021, partially offset by the acquisition of the Excelsior vessel.

Selling, general and administrative expenses

Selling, general and administrative expenses were $66.1 million for the year ended December 31, 2022, an increase of $19.0 million, as compared to $47.1 million for the year ended December 31, 2021. The increase was primarily due to incremental costs incurred in conjunction with our transition to a publicly traded company and additional business development activities.

Restructuring, transition and transaction expenses

Restructuring, transition and transaction expenses were $6.9 million for the year ended December 31, 2022, a decrease of $7.1 million, as compared to $14.0 million for the year ended December 31, 2021. The decrease was due to the completion of our IPO in April 2022.

Interest expense

Interest expense was $33.9 million for the year ended December 31, 2022, an increase of $2.0 million, as compared to $31.9 million for the year ended December 31, 2021. Interest expense increased primarily due to increases in LIBOR rates, partially offset by lower balances remaining on our finance leases and long-term debt.

Interest expense – related party

Interest expense – related party was $25.6 million for the year ended December 31, 2022, a decrease of $23.3 million, as compared to $48.9 million for the year ended December 31, 2021. Interest expense decreased primarily due to the acquisition of the Foundation Vessels.

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Early extinguishment of lease liability on vessel acquisition

In the year ended December 31, 2022, we incurred a $21.8 million expense as a result of the difference between the consideration given to acquire Excellence and the historical finance lease liability.

Other income, net

Other income, net was $0.3 million for the year ended December 31, 2022, a decrease of $0.3 million, as compared to $0.6 million for the year ended December 31, 2021. The decrease was primarily due to foreign currency exchange losses related to our operations in Brazil and Argentina, partially offset by higher interest income received on cash balances invested in money market funds.

Provision for income taxes

The provision for income taxes for the years ended December 31, 2022 and 2021 was $28.3 million and $21.2 million, respectively. The increase was primarily attributable to the year-over-year change in the geographical distribution of income and the U.S. income tax incurred at the level of Excelerate Energy, Inc. since April 2022 of $3.6 million for the year ended December 31, 2022.

The effective tax rate for the years ended December 31, 2022 and 2021 was 26.1% and 33.9%, respectively. The decrease was primarily driven by the geographical distribution of income and the varying tax regimes of jurisdictions. Our effective tax rate was also impacted by the reduction of income before tax due to the loss on early extinguishment of the lease liability on acquisition of Excellence without a corresponding tax benefit, which increased our effective tax rate by 4.2% for the year ended December 31, 2022. Additionally, our effective tax rate was impacted by 3.3% for the year ended December 31, 2022 due to additional tax recorded since being subject to U.S. income taxes at the corporate level beginning in April 2022.

Excelerate is a corporate entity for U.S. federal and state income tax purposes. Excelerate’s accounting predecessor, EELP is treated as a pass-through entity for income tax purposes and has generally not been subject to U.S. federal and most state income taxes. Instead, EELP’s U.S. income is allocated to its Class A and Class B partners proportionate to their interest. As such, the Company’s provision for income tax includes U.S. taxes incurred at the corporate level beginning in April 2022.

The Company has international operations that are also subject to foreign income tax and U.S. corporate subsidiaries subject to U.S. federal tax. Therefore, our effective income tax rate is dependent on many factors, including the Company’s geographical distribution of income, a rate benefit attributable to the portion of the Company’s earnings not subject to corporate level taxes, foreign exchange impacts, and the impact of nondeductible items and foreign exchange impacts as well as varying tax regimes of jurisdictions. In one jurisdiction, the Company’s tax rate is significantly less than the applicable statutory rate as a result of a tax holiday that was granted. This tax holiday will expire in 2033 at the same time that our contract and revenue with our customer ends.

Net income attributable to non-controlling interest

Net income attributable to non-controlling interest was $55.1 million for the year ended December 31, 2022, an increase of $52.1 million, as compared to $3.0 million for the year ended December 31, 2021. The increase in net income attributable to non-controlling interest was primarily due to the addition of non-controlling interest related to owners of our Class B Common Stock after our IPO, partially offset by higher maintenance costs at one of our terminal locations.

Net loss attributable to non-controlling interest – ENE Onshore

Net loss attributable to non-controlling interest – ENE Onshore was $1.4 million for the year ended December 31, 2022, a decrease of $1.6 million, as compared to $3.0 million for the year ended December 31, 2021. Net loss attributable to non-controlling interest – ENE Onshore decreased primarily due to additional capacity sales revenue.

Liquidity and Capital Resources

Based on our cash positions, cash flows from operating activities and borrowing capacity on our debt facilities, we believe we will have sufficient liquidity for the next 12 months for ongoing operations, planned capital expenditures, other investments, debt service obligations, payment of tax distributions and our announced and expected quarterly dividends and distributions, as described in Part II, Item 5 – Our Dividend and Distribution Policy. For more information regarding our planned dividend payments, see Note 13 – Equity. As of December 31, 2023, we had $555.9 million in unrestricted cash and cash equivalents.

Our proceeds from the IPO in April 2022 were approximately $416.2 million, after deducting underwriting discounts and commissions, but before deducting IPO-related expenses of $7.6 million. Approximately $50.0 million of the IPO net proceeds were used to fund, in part, EELP's purchase of the Foundation Vessels. The remaining proceeds are expected to be used to fund our growth strategy, working capital, and other general corporate purposes.

At times, we import and sell natural gas and LNG into the countries in which we operate. Some of the inventory purchases that we make to fulfill these sales could potentially exceed cash on hand. We plan to fund any cash shortfalls with borrowings under the EE

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Revolver (as defined herein). Management believes the EE Revolver will provide sufficient liquidity to execute our contractual purchase obligations. In the event sufficient funds were not available under the EE Revolver, we would seek alternative funding sources.

We have historically funded our business, including meeting our day-to-day operational requirements, repaying our indebtedness and funding capital expenditures, through debt financing, capital contributions and our operating cash flows as discussed below. We expect that our future principal uses of cash will also include additional capital expenditures to fund our growth strategy, pay income taxes and make distributions from EELP to fund income taxes, fund our obligations under the TRA, and pay cash dividends and distributions. Any determination to pay dividends to holders of our common stock and distributions to holders of EELP’s Class B interests will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, covenant compliance, restrictions in our existing and any future debt and other factors that our board of directors deems relevant. In the future we may enter into arrangements to grow our business or acquire or invest in complementary businesses which could decrease our cash and cash equivalents and increase our cash requirements. As a result of these and other factors, we could use our available capital resources sooner than expected and may be required to seek additional equity or debt.

Cash Flow Statement Highlights

Years Ended December 31, 2023, 2022 and 2021

Operating Activities

Cash flows provided by operating activities increased by $6.8 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to:

•
a $238.2 million increase in inventory cash flows primarily due to Brazil inventory sales during the year ended December 31, 2023;

•
a $204.2 million decrease in cash flows used in settling accounts payable and accrued liabilities, primarily due to fewer LNG cargo purchases in the year ended December 31, 2023 related to Brazil natural gas sales activity;

•
a $46.8 million increase in net income;

•
a $17.0 million increase in depreciation and amortization expense, as discussed above; and

•
a $15.5 million decrease in cash flows used in settling operating lease assets and liabilities, primarily due to the acquisition of Sequoia which was accounted for as an operating lease in 2022;

•
partially offset by a $252.8 million decrease in cash received related to deferred revenues, primarily related to prepayments of Brazil natural gas sales;

•
a $218.9 million decrease in cash flows from collecting accounts receivable, primarily due to natural gas sales in Brazil, partially offset by collections of receivables in the year ended December 31, 2023 related to Finland natural gas sales;

•
a $21.8 million early extinguishment of lease liability on vessel acquisition in 2022; and

•
a $17.0 million decrease in the amortization of operating lease right-of-use assets, primarily due to the acquisition of Sequoia which was accounted for as an operating lease in 2022.

Cash flows provided by operating activities increased by $83.5 million for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to:

•
a $445.1 million decrease in accounts receivable, primarily related to collections of receivables related to Brazil natural gas sales;

•
a $160.5 million increase in deferred revenues, primarily related to collection of prepayments related to Brazil natural gas sales;

•
a $38.8 million increase in net income;

•
a $21.8 million early extinguishment of lease liability on vessel acquisition in the year ended December 31, 2022, as described in “— Consolidated Results of Operations—Net income”;

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•
a $14.1 million decrease in inventory related cash outflows, primarily due to purchases related to Bahia Terminal startup in December 2021 exceeding LNG purchases related to Brazil natural gas sales activity and Inkoo Terminal activity in Finland during the year ended December 31, 2022; and

•
partially offset by a $600.0 million decrease in accounts payable and accrued liabilities, primarily due to decreased outstanding LNG cargo purchase payments related to Brazil natural gas sales as of December 31, 2022.

Investing Activities and Capital Expenditures

Cash flows used in investing activities were primarily comprised of capital expenditures made for the purchases of property and equipment, which increased by $189.4 million for the year ended December 31, 2023, as compared to the same period in 2022. The increase was primarily due to the purchase of Sequoia and vessel upgrades made ahead of beginning service at the Inkoo Terminal in Finland.

Cash flows used in investing activities were comprised of capital expenditures made for the purchases of property and equipment, which increased by $83.2 million for the year ended December 31, 2022, as compared to the same period in 2021. The increase in cash used for purchases of property and equipment was primarily due to the purchase of the Foundation Vessels, our first installment payment on the Newbuild Agreement (as defined herein), and our power barge project in Albania.

Financing Activities

Cash flows provided by financing activities decreased by $229.8 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to proceeds of $412.1 million from the IPO sale of Class A Common Stock in 2022, a $13.4 million increase in distributions to shareholders and joint venture partners and $6.6 million of repayments on a note receivable from Kaiser during the year ended December 31, 2022, partially offset by $174.8 million increase in net borrowings on our long-term debt and Term Loan Facility (as defined herein) and $25.0 million in cash payments in 2022 made as part of the early extinguishment of a lease liability related to the IPO transaction.

Cash flows provided by financing activities increased by $465.3 million for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to $412.1 million of net IPO proceeds, a $78.2 million decrease in net cash outflows to Kaiser-Francis Management Company, L.L.C. (“KFMC”) from EELP on a promissory note that was terminated in November 2021 and a $28.3 million decrease in finance lease payments, partially offset by $25.0 million in cash payments made as part of the early extinguishment of a lease liability related to the IPO transaction, $26.7 million of net payments on our other long-term debt, and a $4.8 million increase in deferred financing costs paid.

Repurchase of Equity Securities

On February 22, 2024, our board of directors approved a share repurchase program to purchase up to $50 million of our Class A Common Stock (the “Program”). The board of directors approved the Program because it believed that it (i) would be a prudent use of the Company’s available cash, (ii) would enhance the long-term value of the Class A Common Stock, (iii) would demonstrate management’s and the board of directors’ confidence in the business and (iv) is advisable and in the best interests of the Company. The Program does not obligate us to acquire any specific number of shares and will expire on February 28, 2026, and the Program may be suspended, extended, modified or discontinued at any time. Under the Program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions and/or a non-discretionary trading plan, all in compliance with the rules of the SEC and other applicable legal requirements. The timing, manner, price and amount of any Class A Common Stock repurchases under the Program are determined by us in our discretion and depend on a variety of factors, including legal requirements, price, and business, economic, and market conditions. The Program may be modified, suspended, or discontinued at any time without prior notice.

Debt Facilities

Revolving Credit Facility and Term Loan Facility

On April 18, 2022, EELP entered into a senior secured revolving credit agreement, by and among EELP, as borrower, Excelerate, as parent, the lenders party thereto, the issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which the lenders and issuing banks thereunder made available a revolving credit facility (“EE Revolver”), including a letter of credit sub-facility, to EELP. The EE Revolver enabled us to borrow up to $350.0 million over a three-year term originally set to expire in April 2025.

Also, on April 18, 2022, the Company borrowed under the EE Revolver, on the closing day of such facility, and used the proceeds to repay the KFMC Note (as defined herein) in full. The KFMC Note was terminated in connection with such repayment.

On March 17, 2023, EELP entered into an amended and restated senior secured credit agreement (“Amended Credit Agreement”), by and among EELP, as borrower, Excelerate, as parent, the lenders party thereto, the issuing banks party thereto and Wells Fargo Bank,

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N.A., as administrative agent. Under the Amended Credit Agreement, EELP obtained a new $250.0 million term loan facility (the “Term Loan Facility” and, together with the EE Revolver as amended by the Amended Credit Agreement, the “EE Facilities”). The EE Facilities mature in March 2027. The Amended Credit Agreement requires EELP to maintain (i) a maximum consolidated total leverage of 3.50x, provided that, if the aggregate value of all unsecured debt is equal to or greater than $250.0 million, the maximum permitted consolidated total leverage increases to 4.25x, (ii) collateral vessel maintenance coverage to be not less than the greater of (a) $750.0 million and (b) 130% of the sum of the total credit exposure under the Amended Credit Agreement and (iii) a minimum consolidated interest coverage ratio of 2.50x. Proceeds from the EE Revolver may be used for working capital and other general corporate purposes and up to $269.5 million of the EE Revolver may be used for letters of credit.

In April 2023, Excelerate purchased Sequoia for $265.0 million using $250.0 million borrowed through our Term Loan Facility together with cash on hand. Concurrently with the purchase, the Company entered into interest rate swaps for the same notional amount as the Term Loan Facility. The purpose of the swaps is to hedge our exposure to fluctuations in SOFR related to borrowings on the Term Loan Facility. The interest rate swaps have maturity, payment and reset dates that align with those of the Term Loan Facility.

On September 8, 2023, EELP entered into an amendment to the Amended Credit Agreement (the “First Amendment”). The First Amendment provides for, among other things (i) inclusion of commodity and foreign exchange swap termination value in the collateral vessel maintenance coverage test and (ii) an update to the ordering of payment applications in the event of default.

In December 2023, we paid off $55.2 million of the principal outstanding on our Term Loan Facility. We also terminated the same notional value of the interest rate swaps we had previously entered into to hedge the fluctuations in the SOFR rates associated with the variable interest rate on the loan.

Borrowings under the EE Facilities bear interest at a per annum rate equal to the term SOFR reference rate for such period plus an applicable margin, which applicable margin is based on EELP’s consolidated total leverage ratio as defined and calculated under the Amended Credit Agreement and can range from 2.75% to 3.50%. The unused portion of the EE Revolver commitment is subject to an unused commitment fee calculated at a rate per annum ranging from 0.375% to 0.50% based on EELP's consolidated total leverage ratio.

The Amended Credit Agreement contains customary representations, warranties, covenants (affirmative and negative, including maximum consolidated total leverage ratio, minimum consolidated interest coverage ratio, and collateral vessel maintenance coverage covenants), and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of amounts borrowed under the EE Facilities. As of December 31, 2023, the Company had issued $49.4 million in letters of credit under the EE Revolver. As a result of the EE Revolver’s financial ratio covenants and after taking into account the outstanding letters of credit issued under the facility, all of the $300.6 million of undrawn capacity was available for additional borrowings as of December 31, 2023.

Experience Vessel Financing

In December 2016, we entered into a sale leaseback agreement with a third party to provide $247.5 million of financing for Experience. Due to our requirement to repurchase the vessel at the end of the term, the transaction was accounted for as a failed sale leaseback (a financing transaction). Under failed sale leaseback accounting, we are deemed the owner of the vessel and will continue to recognize the vessel on our consolidated balance sheets, with the proceeds received recorded as a financial obligation. Through December 2021, we made quarterly principal payments of $5.0 million and paid interest at the three-month LIBOR plus 4.2%. The original loan matured in 2026 when the remaining balance of $49.5 million was payable. In December 2021, the agreement was amended to extend the term to December 2033, reduce the interest margin to 3.25% and reduce the quarterly principal payments to $3.1 million. After the final quarterly payment in December 2033, there will be no remaining balance due. We incurred debt issuance costs of $1.2 million related to the amendment, which will be amortized over the life of the loan. Debt issuance costs of $6.0 million related to the original loan are presented as a direct deduction from the debt and have been amortized over the life of the original loan. The agreement contains certain security rights related to Experience in the event of default.

In the second quarter of 2023, we executed an amendment to convert the reference rate in the Experience Vessel Financing from the LIBOR to the SOFR yield curve with interest payments at the three-month SOFR plus 3.4% through the loan’s maturity in December 2033.

Our vessel financing loan has certain financial covenants as well as customary affirmative and negative covenants, which we must maintain to remain compliant with the loan. We must maintain a minimum equity of $500.0 million, a maximum debt to equity ratio of 3.5 to 1 and a minimum cash and cash equivalents balance including loan availability of $20.0 million. Our agreement also requires that a three-month debt service reserves be funded and that the value of the vessel equal or exceed 110% of the remaining amount outstanding, in addition to other affirmative and negative covenants customary for vessel financings. The financing also requires the vessel to carry typical vessel marine insurances.

2017 Bank Loans

On June 23, 2017, we entered into two loan agreements with external banks (the “2017 Bank Loans”) to finance the Moheshkhali LNG (“MLNG”) terminal in Bangladesh. The first arrangement allowed us to borrow up to $32.8 million. The loan accrues interest at

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the six-month SOFR plus 2.85%. Payments are due semi-annually with an original scheduled maturity date of April 15, 2030. We partially prepaid the loan during 2019. As a result of this prepayment, the loan matures on October 15, 2029. In the fourth quarter of 2023, we executed an amendment to convert the reference rate from the LIBOR to the SOFR yield curve effective on the first interest payment date occurring after June 30, 2023. Prior to the amendment, the Company made interest payments at the six-month LIBOR plus 2.42%. The debt issuance costs of $1.3 million are presented as a direct reduction from the debt liability and are amortized over the life of the loan.

The second arrangement allowed us to draw funds up to $92.8 million. The loan accrues interest at the three-month SOFR plus 4.76%. Payments are due quarterly with an original scheduled maturity date of April 15, 2030. We partially prepaid the loan during 2019. As a result of this prepayment, the loan matures on October 15, 2029. In the fourth quarter of 2023, we executed an amendment to convert the reference rate from the LIBOR to the SOFR yield curve effective on the first interest payment date occurring after June 30, 2023. Prior to the amendment, the Company made interest payments at the three-month LIBOR plus 4.50%. Debt issuance costs of $4.8 million are presented as a direct deduction from the debt liability and are amortized over the life of the loan. The agreement contains certain security rights related to MLNG terminal assets and project contracts in the event of default.

The 2017 Bank Loans require compliance with certain financial covenants, as well as customary affirmative and negative covenants associated with limited recourse project financing facilities. The loan agreements also require that a six-month debt service reserve amount be funded and that an off-hire reserve amount be funded monthly to cover operating expenses and debt service while the vessel is away during drydock major maintenance. The loan agreements also require that the MLNG terminal and project company be insured on a stand-alone basis with property insurance, liability insurance, business interruption insurance and other customary insurance policies. The respective project company must have a quarterly debt service coverage ratio of at least 1.10 to 1. In 2021, 2022 and 2023, waivers were obtained for immaterial non-financial covenants and are still in effect.

Exquisite Vessel Financing

In June 2018, we entered into a sale leaseback agreement with the Nakilat JV to provide $220.0 million of financing via a fifteen-year lease agreement for Exquisite at 7.73%. The lease agreement has a symmetrical put and call option at the end of the original term or, optionally, two five-year extensions with symmetrical put and call options after each extension. The agreement did not meet the terms for recognition of a sale leaseback transaction and instead was treated as financing due to the terms of the transaction. The agreement contains certain security rights related to Exquisite in the event of default.

KFMC Note

On November 9, 2018, EELP entered into a promissory note with KFMC, an affiliate of Kaiser as lender, which allowed EELP to draw funds up to $100.0 million (as amended, restated, supplemented or otherwise modified, the “KFMC Note”). The KFMC Note was amended on November 17, 2020 to (i) extend the final payment date from December 31, 2020 to December 31, 2022, (ii) increase the per annum interest rate from LIBOR plus 1.5% to LIBOR plus 1.55% and (iii) make certain revisions to prepayment conditions. The KFMC Note was further amended and restated in its entirety on September 29, 2021 to (i) make certain changes to the final payment date, including removing KFMC’s ability to demand payment, and extending the final payment date to December 31, 2023 and (ii) allow EELP to draw funds at EELP’s discretion without prior approval by KFMC. The KFMC Note was further amended on October 1, 2021 to increase the maximum aggregate principal amount from $100.0 million to $250.0 million. In April 2022, the Company borrowed under the EE Revolver and used the proceeds to repay the KFMC Note in full. The KFMC Note was terminated in connection with such repayment, as discussed in Note 10 – Long-term debt, net.

KFMC-ENE Onshore Note

In September 2021, in connection with certain entities under common control of Kaiser being contributed to EELP, ENE Lateral assigned to KFMC all of its right, title and interest to receive payment under a note with ENE Onshore (the “KFMC-ENE Onshore Note”), which assignment was made in partial satisfaction of the amounts owed by ENE Lateral under a promissory note it entered into with KFMC in December 2015 (as amended, restated, supplemented or otherwise modified, the “ENE Lateral Facility”). As a result of such assignment, ENE Onshore was obligated to pay to KFMC all amounts under the KFMC-ENE Onshore Note. In November 2021, ENE Onshore received an equity contribution sufficient to allow it to remit payment to KFMC of the then-outstanding KFMC-ENE Onshore Note balance, and KFMC and ENE Onshore subsequently entered into an amended and restated note allowing a maximum commitment of $25.0 million. The KFMC-ENE Onshore Note was settled in full and canceled in connection with the ENE Onshore Merger.

As of December 31, 2023, the Company was in compliance with the covenants under its debt facilities.

Foundation Vessels Purchase

In exchange for (i) 7,854,167 shares of Class A Common Stock with a fair market value of $188.5 million, (ii) a cash payment of $50.0 million and (iii) $21.5 million of estimated future payments under the TRA, EELP purchased from Maya Maritime LLC, a

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wholly-owned subsidiary of the Foundation, all of the issued and outstanding membership interests in the Foundation Vessels. In 2018, EELP entered into an agreement with a customer to lease Excellence with the vessel transferring ownership to the customer at the conclusion of the agreement for no additional consideration. Historically, EELP, as a lessor, has accounted for Excellence contract with our customer as a sales-type lease in the consolidated balance sheet in accordance with Accounting Standards Codification 842, Leases. Excellence will continue to be accounted for as a sales-type lease and thus did not result in an adjustment to property and equipment. The difference between the consideration given to acquire Excellence and the historical finance lease liability resulted in a $21.8 million early extinguishment of lease liability loss on our consolidated statements of income.

Other Contractual Obligations

Operating Leases

We lease a terminal and offices in various locations under noncancelable operating leases. As of December 31, 2022, we had future minimum lease payments of $88.6 million. As of December 31, 2023, we had future minimum lease payments totaling $7.3 million and are committed to $2.1 million in year one, $2.9 million for years two and three, $1.8 million for years four and five and $0.4 million thereafter.

Finance Leases

Certain enforceable vessel charters and pipeline capacity agreements are classified as finance leases, and the right-of-use assets are included in property and equipment. As of December 31, 2022, we had future minimum lease payments totaling $307.3 million. As of December 31, 2023, we had future minimum lease payments totaling $274.1 million and are committed to $33.2 million in payments in year one, $66.5 million for years two and three, $60.8 million for years four and five, and $113.5 million thereafter.

Newbuild Agreement Commitments

In October 2022, we signed a binding shipbuilding contract (“the Newbuild Agreement”) with HD Hyundai Heavy Industries for a new FSRU to be delivered in 2026. As part of the Newbuild Agreement, we currently expect to pay approximately $330.0 million, subject to adjustment. Related payments are due in five installments with the final installment due concurrently with the delivery of the vessel, which is expected in 2026. During the year ended December 31, 2022, we made the first installment payment of approximately $30.0 million. Our future payment commitments related to the Newbuild Agreement are expected to be approximately $50.0 million in 2024 and $250.0 million in 2025-2026.

Tax Receivable Agreement

In connection with the IPO, we entered into the TRA with the TRA Beneficiaries. The TRA will provide for payment by us to the TRA Beneficiaries of 85% of the amount of the net cash tax savings, if any, that we are deemed to realize as a result of our utilization of certain tax benefits resulting from (i) certain increases in the tax basis of assets of EELP and its subsidiaries resulting from exchanges of EELP partnership interests in the future, (ii) certain tax attributes of EELP and subsidiaries of EELP (including the existing tax basis of assets owned by EELP or its subsidiaries and the tax basis of certain assets purchased from the Foundation) that exist as of the time of the IPO or may exist at the time when Class B interests of EELP are exchanged for shares of Class A Common Stock, and (iii) certain other tax benefits related to us entering into the TRA, including tax benefits attributable to payments that we make under the TRA. See “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate Energy, Inc—Tax Receivable Agreement” in the Prospectus for more information about the TRA.

The payments that we will be required to make under the TRA, including those made if we elect to terminate the agreement early, have the potential to be substantial. Based on certain assumptions, including no material changes in the relevant tax law and that we earn sufficient taxable income to realize the full tax benefits that are the subject of the TRA, we expect that future payments to the TRA Beneficiaries (not including Excelerate) will equal $73.1 million in the aggregate, although the actual future payments to the TRA Beneficiaries will vary based on the factors discussed in “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate Energy, Inc—Tax Receivable Agreement” in the Prospectus and estimating the amount and timing of payments that may be made under the TRA is by its nature imprecise, as the calculation of amounts payable depends on a variety of factors and future events.

In December 2023, we made our first payment under the TRA of $3.4 million. The TRA payment forecasted to be made in 2024 as of December 31, 2023, is $6.1 million. In addition, payments we make under the TRA will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return. If EE Holdings were to have exchanged all of its EELP interests as of the balance sheet date, we would recognize a liability for payments under the TRA of approximately $166.6 million, assuming (i) that EE Holdings exchanged all of its EELP interests using EE’s December 31, 2023 closing market price of $15.46 per share of Class A Common Stock, (ii) no material changes in relevant tax law, (iii) a constant combined effective income tax rate of 21.0% and (iv) that we have sufficient taxable income in each year to realize on a current basis the increased depreciation, amortization and other tax benefits that are the subject of the TRA. We expect to receive distributions from EELP in order to make any required payments under the TRA.

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However, we may need to incur debt to finance payments under the TRA to the extent such distributions or our cash resources are insufficient to meet our obligations under the TRA as a result of timing discrepancies or otherwise.

Venture Global SPA

In February 2023, we executed a 20-year SPA with Venture Global LNG (the “Venture Global SPA”). Under the Venture Global SPA, we will purchase 0.7 MTPA of LNG on a free-on-board basis from the Plaquemines LNG facility in Plaquemines Parish, Louisiana. Our purchase commitment will be based on the final settlement price of monthly Henry Hub natural gas futures contracts plus a contractual spread. Using Henry Hub natural gas futures pricing as of December 31, 2023, our average annual commitment is estimated to be approximately $249.0 million. The start of this commitment, however, is dependent on the LNG facility becoming operational, which is not expected in the next twelve months.

QatarEnergy SPA

In January 2024, we executed a 15-year SPA with QatarEnergy (the “QatarEnergy SPA”). Under the QatarEnergy SPA, we have agreed to purchase 0.85 to 1.0 MTPA of LNG from QatarEnergy beginning in 2026. QatarEnergy will deliver 0.85 MTPA of LNG in 2026 and 2027 and 1.0 MTPA from 2028 to 2040. These LNG volumes are intended to be used to supply sales under the Petrobangla SPA (as defined herein).

Critical Accounting Policies and Estimates

The accounting policies and estimates discussed below are considered by management to be critical to an understanding of our financial statements as their application requires the most significant judgments from management in estimating matters for financial reporting that are inherently uncertain. For additional information about our accounting policies and estimates, see the Note 2 – Summary of significant accounting policies to the Consolidated Financial Statements.

Leases

We account for leases under the provisions of Accounting Standards Codification (“ASC”) 842, Leases. In the application of ASC 842 for leases in which we are the lessee, certain estimates and management judgments are required such as determining the useful life of a leased asset, the discount rate used in calculating the present value of lease payments, and when leases have extension or termination options that are likely to be exercised. When we are the lessor, estimates are required in allocating the contract consideration between the lease component and non-lease components on a relative standalone selling price basis.

Lessee Accounting

As of the lease commencement date, we recognize a liability for our lease obligation, initially measured at the present value of lease payments not yet paid, and an asset for our right to use the underlying asset, initially measured equal to the lease liability and adjusted for lease payments made at or before lease commencement, lease incentives, and any initial direct costs. The discount rate used to determine the present value of the lease payments is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment.

The initial recognition of the lease obligation and right-of-use asset excludes short-term leases. Short-term leases are leases with an original term of one year or less, excluding those leases with an option to extend the lease for greater than one year or an option to purchase the underlying asset that the lessee is deemed reasonably certain to exercise. We have elected, as an accounting policy, not to apply the recognition requirements to short-term leases. Instead, we may recognize the lease payments in the statements of income on a straight-line basis over the lease term.

We have certain lease agreements that provide for the option to extend or terminate early, which was evaluated on each lease to arrive at the lease term. If we were reasonably certain to exercise a renewal or termination option, this period was factored into the lease term. As of December 31, 2023, we did not have any lease agreements with residual value guarantees or material restrictions or covenants.

Lessor Accounting

We determined that our time charter and terminal use contracts contain a lease and a performance obligation for the provision of time charter and other regasification services. Leases are classified based upon defined criteria either as sales-type, direct financing, or operating leases by the lessor.

For those leases classified as sales-type, the underlying asset is derecognized and the net investment in the lease is recorded. We have determined that these contracts contain a lease component for the use of the vessel and non-lease components relating to operation of the vessels. We have allocated the contract consideration between the lease component and non-lease components on a relative standalone selling price basis. We utilize a combination of approaches to estimate the standalone selling prices when the directly observable selling price is not available by utilizing information available such as market conditions and prices, entity-specific factors,

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and internal estimates when market data is not available. Given that there are no observable standalone selling prices for either of these two components, judgment is required in determining the standalone selling price of each component.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. New assets, modifications to existing assets which improve the asset’s operational efficiency, capacity or useful life, and our finance leases are assigned a useful life. Useful lives of property and equipment are determined using various assumptions, including our expected use of our assets and the supply of and demand for LNG and natural gas in the markets we serve, normal wear and tear of assets, and the expected extent and frequency of maintenance. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, less an estimated salvage value.

During the fourth quarter of 2023, the Company performed a review of the estimated useful lives of our FSRU vessels. As a relatively new asset class, being first built in 2005, we initially estimated a useful life of 30 years with no salvage value. As the vessels approach almost 20 years of life, there has been improved visibility into the expected term of FSRU productive capabilities, demand, and salvage potential. As a result, the Company changed the useful lives of our FSRU vessel assets to 40 years and added an estimated salvage value.

Asset retirement obligations (“ARO”)

We recognize liabilities for retirement obligations associated with tangible long-lived assets when there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The fair value of a liability for an ARO is recognized in the period which it is incurred, if a reasonable estimate of fair value can be made. In order to estimate the fair value, we use judgments and assumptions for factors including the existence of legal obligations for an ARO; technical assessments of the assets; discount rates; inflation rates; and estimated amounts and timing of settlements. The offsetting asset retirement cost is recorded as an increase to the carrying value of the associated property and equipment on the consolidated balance sheets and depreciated over the estimated useful life of the asset. In periods subsequent to the initial measurement of an ARO, we recognize period-to-period changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows.

Income taxes

We are a corporation for U.S. federal and state income tax purposes. EELP, is treated as a pass-through entity for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax at the entity level. As part of our income tax accounting process, we are required to make certain assumptions and estimations.

We record valuation allowances to reflect the estimated amount of certain deferred tax assets that are more likely to not be realized. In making such a determination, we evaluate a variety of factors, including our operating history, accumulated deficit, and the existence of taxable or deductible temporary differences and reversal periods.

The effect of tax positions is recognized only if those positions are more likely than not of being sustained. Conclusions reached regarding tax positions are continually reviewed based on ongoing analyses of tax laws, regulations, and interpretations thereof. To the extent that our 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. We recognize the tax benefit from an uncertain tax provision only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the tax position.

Tax receivable agreement

In connection with the IPO, we entered into the TRA with the TRA Beneficiaries. The TRA will provide for payment by us to the TRA Beneficiaries of 85% of the amount of the net cash tax savings, if any, that we are deemed to realize as a result of our utilization of certain tax benefits. The amount and timing of future payments to the TRA Beneficiaries will vary as the calculation depends on a variety of factors and future events. Potential future actions taking by the Company, such as mergers or other forms of business combinations that would constitute a change in control, may influence the timing and amount of payments we make under the TRA in a manner that does not correspond to our use of the corresponding tax benefits.

Recent Accounting Pronouncements

Refer to Note 2 – Summary of significant accounting policies to the notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for information regarding recently issued accounting pronouncements.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto included in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included in Item 1A of this Annual Report and our other filings with the SEC. Please also see the section titled “Forward-Looking Statements” in this Annual Report.

Overview

Excelerate is changing the way the world accesses cleaner and more reliable energy by delivering regasified natural gas, benefiting hundreds of millions of people around the world. From our founding, we have focused on providing flexible LNG solutions to markets in diverse environments across the globe, providing a lesser emitting form of energy to markets that often rely on coal as their primary energy source. At Excelerate, we believe that access to energy sources such as LNG is critical to assisting markets in their decarbonization efforts, while at the same time promoting economic growth and improving quality of life.

We have grown our business significantly since our first FSRU charter in 2003, and today, we are a profitable energy company with a geographically diversified business model. Our business spans the globe, with regional offices in 11 countries and operations in Argentina, Bangladesh, Brazil, Finland, Pakistan, UAE, and the United States. We are the largest provider of regasified LNG in Argentina and Bangladesh and one of the largest providers of regasified LNG in Brazil and Pakistan, and we operate the largest FSRU in Brazil. We also lease the Bahia Terminal from Petrobras and in December 2021, started importing LNG and selling natural gas to the Brazilian market. We also have plans to sell natural gas to other downstream customers in Brazil, Europe and Bangladesh. In each of these regions, we offer a cleaner energy source from which power can be generated consistently. The high value our customers place on our services has resulted in a reliable source of revenues to us, while our global reach helps balance seasonal demand fluctuation among the geographies in which we operate. For the year ended December 31, 2022, we generated revenues of $2.5 billion, net income of $80.0 million and Adjusted EBITDAR of $331.1 million. For the year ended December 31, 2021, we generated revenues of $888.6 million, net income of $41.2 million and Adjusted EBITDAR of $291.1 million. For the year ended December 21, 2020 we generated revenues of $430.8 million, net income of $32.9 million and Adjusted EBITDAR of $256.2 million. For more information regarding our non-GAAP measure Adjusted EBITDAR and a reconciliation to net income, the most comparable U.S. Generally Accepted Accounting Principles (“GAAP”) measure, see “How We Evaluate Our Operations.”

Our business focuses on the integration of the natural gas-to-power LNG value chain, and as part of this value chain, we operate regasification terminals in global economies that utilize our FSRU fleet. Our business is substantially supported by time charter contracts, which are effectively long-term, take-or-pay arrangements and provide consistent revenue and cash flow from our high-quality customer base. As of December 31, 2022, we operate a fleet of ten purpose-built FSRUs, have completed more than 2,500 STS transfers of LNG with over 40 LNG operators since we began operations and have safely delivered more than 6,000 BCF of natural gas through 16 LNG regasification terminals. For the years ended December 31, 2022, 2021 and 2020, we generated revenues of $445.2 million, $468.0 million and $430.8 million, respectively, from our FSRU and terminal services businesses, representing approximately 18%, 53% and 100% of our total revenues for each of those periods.

We also procure LNG from major producers and sell natural gas through our flexible LNG terminals. For the years ended December 31, 2022 and 2021 we generated revenues of $2,027.8 million and $420.5 million, respectively, from LNG and natural gas sales, representing approximately 82% and 47% of our total revenues for each of those periods. We had no LNG and natural gas sales in 2020. The commercial momentum that we have established in recent years and the increasing need for access to LNG around the world, have resulted in a significant portfolio of new growth opportunities for us to pursue. In addition to our FSRU and terminal services businesses and natural gas sales, we plan to expand our business to provide customers with an array of products, including LNG-to-power projects. We are evaluating and pursuing early-stage projects with opportunities in Europe, Asia Pacific, Latin America, and the Middle East.

Recent Trends and Outlook

The Russia-Ukraine war continues to reshape global energy markets. Unexpected shifts in LNG trade led to a tightening of global gas markets, resulting in extreme price volatility impacting economies across the globe. The decline of Russian natural gas pipeline exports to Europe led the continent to increase LNG imports to approximately 128 MT in 2022 from approximately 82 MT in 2021. While global LNG supply increased in 2022 to 400 MT from 382 MT in 2021 as a result of new U.S. LNG export projects coming online and higher liquefaction utilization, increased European demand for LNG, combined with U.S. and European sanctions on Russian natural gas and other energy exports, led to tighter global natural gas supply and higher spot market prices. For example, Dutch Title Transfer Facility (“TTF”) pricing rose to record highs, averaging $70.74/MMBtu in August 2022 compared to $15.84/MMBtu in August 2021. The high prices reduced LNG spot demand from Latin America, the Middle East, and Asia. Total demand for LNG from these regions declined from approximately 300 MT in 2021 to approximately 272 MT in 2022 as it became costly for industries and companies to operate on natural gas and countries switched back to less expensive coal and other liquid fuels for power generation and to satisfy

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industrial demand. Lower Chinese LNG imports due to China’s zero-Covid policy and high spot prices, coupled with new U.S. LNG export projects, helped Europe meet its rapid increase in LNG demand. This was crucial in the third quarter of 2022 as Europe increased its LNG imports to fill storage inventories in preparation for the colder winter months. European storage levels reached 90% of capacity by November 2022. These record high storage levels combined with a warmer-than-normal 2022 – 2023 winter in both Europe and North Asia helped to reduce LNG demand, and therefore pricing, and alleviate market concerns over potential energy shortages. So far in 2023, tepid Chinese demand, despite the lifting of zero-Covid policies, and higher European storage levels, currently at 63% compared to the five year-average of 42% are supporting a continued retreat of benchmark prices, with TTF averaging $18.62/MMBtu through February 2023.

We expect that the market dynamics from 2022 will carry over into 2023 and for a few years after. While LNG demand is expected to be driven by increased European consumption, limited new supply is coming online over the next three years. LNG markets are expected to remain tight and continue to be exposed to supply and demand disruptions. In the longer-term, emerging market power demand growth, underpinned by economic development and continued electrification, is expected to drive natural gas demand. According to Shell’s 2023 LNG Outlook, global LNG demand is estimated to increase to 700 MT by 2040. From 2025 through the end of the decade, approximately 100 MT of new LNG supply is anticipated to come online, with the bulk of supply coming from Qatar and the United States. Although we expect there to be access to affordable long-term LNG supply, risks such as cost inflation and project financing availability could limit or delay project developments.

For many countries, near-term energy decision making is being driven by the need to balance between aspirations for a transition to renewable energy with the pursuit of energy security, coupled with LNG prices. In 2022, countries such as Bangladesh, Pakistan, and India reduced their spot LNG purchases as prices soared. With the retreat in prices so far in 2023, Bangladesh issued its first spot LNG tender since the second quarter of 2022 and received its first cargo in February 2023. We expect that global LNG markets will continue to evolve as energy security is a key driver on how countries are approaching LNG strategies. As a leader in flexible LNG solutions, Excelerate is well positioned to participate in near-term LNG supply opportunities. Recent changes in market behavior have the potential to create more opportunities for deployment of FSRUs and integrated projects for Excelerate, not only in Europe as countries there seek to meet increased demand for LNG, but also in the Southern Hemisphere as countries look to natural gas as their energy transition fuel of choice.

Recent Business Updates and 2022 in Review:

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In March 2023, we closed on an amended and restated $600 million senior secured credit facility, consisting of a $350 million revolving credit facility and a $250 million term loan. The new facilities refinanced our existing EE Revolver, and we intend to use the proceeds from the term loan to exercise our right to purchase the FSRU Sequoia. We gave notice to the vessel owner regarding our intent to exercise our purchase option following the closing of the EE Facilities and expect the purchase to close in April 2023.

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In March 2023, we were awarded a seasonal charter for the Excelsior vessel at the Bahia Blanca GasPort terminal (“Bahia Blanca”) in Argentina. The Excelsior, which began its charter hire with the German government in February 2023, will be placed on a suspension agreement while it is temporarily deployed to Bahia Blanca during the Argentina winter before returning to the Germany charter afterwards.

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In February 2023, we extended our time charter party agreement with Dubai Supply Authority (DUSUP) for the Explorer vessel. Under the terms of the new agreement, the time charter period will be extended by an additional five years from the end of the existing contract in the fourth quarter of 2025.

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In February 2023, we executed the Venture Global SPA under which we will purchase 0.7 million MT per annum of LNG on an FOB basis from the Plaquemines LNG facility in Plaquemines Parish, Louisiana.

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In December 2022, the Exemplar arrived at the Inkoo Terminal in Finland and began service. The vessel’s charter hire commenced October 1, 2022, as it made the voyage to the port of Navantia in Spain for customer-requested winterization upgrades in preparation for its deployment to Finland. Excelerate and Gasgrid Finland Oy (“Gasgrid Finland”) previously announced an executed 10-year, time charter party agreement for Excelerate to provide LNG regasification services. The vessel previously completed its charter at the Bahia Blanca GasPort in Argentina.

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In November 2022, we amended and extended our gas sales agreement with Petrobras (the “Petrobras GSA”), under which we purchase LNG and provide regasified natural gas at the Bahia Terminal in Brazil through December 2023.

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In October 2022, Excelerate signed a binding five-year charter contract with the Government of the Federal Republic of Germany for the FSRU Excelsior to provide regasification services at one of Germany’s planned LNG import terminals that is being developed at the port of Wilhelmshaven by Tree Energy Solutions, E.ON SE and ENGIE SA. The charter hire for Excelsior commenced in February 2023.

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In October 2022, Excelerate signed a binding Shipbuilding Contract (the “Newbuild Agreement”) with HHI for a new FSRU to be delivered in 2026. The state-of-the-art FSRU will be equipped with HHI’s proprietary LNG regasification system, dual fuel engines, selective catalytic reduction system, best-in-class boil-off gas management, and other innovative

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technologies that will drive improved performance and efficiency while lowering emissions. With this newbuild order, Excelerate will have 11 FSRUs in operation or under construction.

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In May 2022, the Payra LNG project was approved in principle by Bangladesh Oil, Gas & Mineral Corporation and Bangladesh’s Energy and Mineral Resources Division, a significant milestone in the approval process. Excelerate has commenced negotiations of the integrated deal, which includes an LNG supply agreement. The Payra LNG project is expected to represent Excelerate’s largest deployment of capital to date and has the potential to increase significantly the scale of the Company’s global operations.

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In February 2022, the Moheshkhali LNG (“MLNG”) expansion project was approved in principle by the government of Bangladesh. Excelerate has commenced commercial negotiations for the expansion of the terminal via a potential extension of our regasification agreement and a long-term LNG supply agreement.

Components of Our Results of Operations

Revenue

We generate revenue through the provision of regasification services using our fleet of FSRUs and LNG terminal assets, as well as physical sales of LNG and natural gas, that are made primarily in connection with our regasification and terminal projects. We provide regasification services through time charters and operation service contracts primarily related to our long-term charter contracts. Most of our time charter revenues are from long-term contracts that function similarly to take-or-pay arrangements in that we are paid if our assets and teams are available and ready to provide services to our customers regardless of whether our customers utilize the services. A portion of our revenue attributable to our charters for the use of our vessels is accounted for as lease revenue, and the revenues attributable to the services provided under those charters are accounted for as non-lease revenue. We generally charge fixed fees for the use of and services provided with our vessels and terminal capacity plus additional amounts for certain variable costs.

Expenses

The principal expenses involved in conducting our business are operating costs, direct cost of gas sales, general and administrative expenses, and depreciation and amortization. A large portion of the fixed and variable costs we incur in our business are in the operation of our fleet of FSRUs and terminals that provide regasification and gas supply to our customers. We manage the level of our fixed costs based on several factors, including industry conditions and expected demand for our services and generally pass-through certain variable costs.

We incur significant equipment costs in connection with the operation of our business, including capital equipment recorded as property and equipment, net on our balance sheets and related depreciation and amortization on our income statement. In addition, we incur repair and maintenance and leasing costs related to our property and equipment utilized both in our FSRU and terminal services and gas sales. Property and equipment includes costs incurred for our fleet of FSRUs and terminal assets, including capitalized costs related to drydocking activities. Generally, we are required to drydock each of our vessels every five years, but vessels older than 15 years of age require a shorter duration drydocking or in-situ bottom survey every two and a half years.

Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses include the following major cost categories: vessel operating costs; personnel costs; repair and maintenance; and leasing costs. These operating costs are incurred for both our FSRU and terminal services revenues and gas sales revenues.

Direct cost of gas sales

Direct cost of gas sales includes the cost of LNG and other fuel and direct costs incurred in selling natural gas and LNG, which are significant variable operating costs. These costs fluctuate in proportion to the amount of our natural gas and LNG sales as well as LNG prices.

Depreciation and amortization expenses

Depreciation expense is recognized on a straight-line basis over the estimated useful lives of our property and equipment assets, less an estimated residual value. Certain recurring repairs and maintenance expenditures required by regulators are amortized over the required maintenance period.

Selling, general and administrative expenses

Selling, general and administrative expenses (“SG&A”) consist primarily of compensation and other employee-related costs for personnel engaged in executive management, sales, finance, legal, tax and human resources. SG&A also consists of expenses associated with office facilities, information technology, external professional services, business development, legal costs and other administrative expenses.

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Restructuring, transition and transaction expenses

We incurred restructuring, transition and transaction expenses related to consulting, legal, and audit costs incurred as part of and in preparation for our IPO.

Other income, net

Other income, net, primarily contains interest income, gains or losses from the effect of foreign exchange rates and gains and losses on asset sales.

Interest expense and Interest expense – related party

Our interest expense is primarily associated with our finance leases liabilities and loan agreements with external banks and related parties.

Earnings from equity-method investment

Earnings from equity-method investment relate to our 45% ownership interest in the Nakilat JV, which we acquired in 2018.

Provision for income taxes

Excelerate is a corporation for U.S. federal and state income tax purposes. EELP, is treated as a pass-through entity for U.S. federal income tax purposes and, as such, has generally not been subject to U.S. federal income tax at the entity level. Instead, EELP’s U.S. income is allocated to its Class A and Class B partners proportionate to their interest. Accordingly, our provision for income taxes includes U.S. taxes incurred at the Excelerate corporate level beginning in April 2022. In addition, EELP has international operations that are subject to foreign income tax and U.S. corporate subsidiaries subject to U.S. federal tax. These taxes are also included in our provision for income taxes.

Net income (loss) attributable to non-controlling interest

Net income (loss) attributable to non-controlling interests includes earnings allocable to our shares of Class B Common Stock as well as earnings allocable to the third-party equity ownership interests in our subsidiary, Excelerate Energy Bangladesh, LLC.

Net income (loss) attributable to non-controlling interest – ENE Onshore

Net income (loss) attributable to non-controlling interest – ENE Onshore includes the earnings allocable to the equity ownership interests in Excelerate New England Onshore, LLC (“ENE Onshore”). On October 17, 2022, EE Holdings, the indirect sole member of ENE Onshore, and EELP, the sole member of Excelerate New England Lateral, LLC (“ENE Lateral”), entered into a merger agreement, pursuant to which ENE Onshore was merged with and into ENE Lateral (the “ENE Onshore Merger”), effective October 31, 2022. ENE Lateral was the surviving entity and ENE Onshore ceased to exist as a separate entity. Prior to the ENE Onshore Merger, Excelerate consolidated ENE Onshore as a variable interest entity as Excelerate was determined to be the primary beneficiary of ENE Onshore. As a result of the ENE Onshore Merger, Excelerate ceased to have a non-controlling interest related to ENE Onshore.

Factors Affecting the Comparability of Our Results of Operations

As a result of a number of factors, our historical results of operations may not be comparable from period to period or going forward. Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations.

Impact of the Reorganization

Following the completion of the IPO in April 2022, we are a corporation for U.S. federal and state income tax purposes. EELP, is treated as a pass-through entity for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax at the entity level. Accordingly, unless otherwise specified, our historical results of operations prior to the IPO do not include provision for U.S. federal income tax for EELP. The reorganization undertaken in connection with the IPO, as described under “Organizational Structure—The Reorganization” in the Prospectus (the “Reorganization”), was accounted for as a reorganization of entities under common control. As a result, our consolidated financial statements recognized the assets and liabilities received in the Reorganization at their historical carrying amounts, as reflected in the historical consolidated financial statements of EELP. In addition, in connection with the Reorganization and the IPO, we have entered into the Tax Receivable Agreement (the “TRA”) with the TRA Beneficiaries, pursuant to which we will be required to pay the TRA Beneficiaries 85% of the net cash savings, if any, that we are deemed to realize as a result of our utilization of certain tax benefits described under “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate Energy, Inc.—Tax Receivable Agreement” in our Prospectus.

Also included in the Reorganization is our acquisition of all of the issued and outstanding membership interests in Excelsior, LLC and FSRU Vessel (Excellence), LLC (f/k/a Excellence, LLC) (collectively, the “Foundation Vessels”). The acquisition of Excelsior, LLC was accounted for as an acquisition of property and equipment at the completion of the Reorganization. The Foundation Vessels

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have historically been accounted for as finance leases in our historical financial statements. In 2018, EELP entered into an agreement with a customer to lease the Excellence vessel with the vessel transferring ownership to the customer at the conclusion of the agreement for no additional consideration. Historically, EELP, as a lessor, has accounted for the Excellence vessel contract with our customer as a sales-type lease in the consolidated balance sheet in accordance with Accounting Standards Codification 842, Leases. The Excellence vessel will continue to be accounted for as a sales-type lease and thus did not result in an adjustment to property and equipment. The difference between the consideration given to acquire the Excellence and the historical finance lease liability resulted in a $21.8 million early extinguishment of lease liability loss on our consolidated statements of income.

Public Company Costs

We have incurred and expect to continue to incur incremental, non-recurring costs related to our transition to a publicly traded corporation, including the costs of the IPO and the costs associated with the initial implementation of our Sarbanes-Oxley Section 404 internal control reviews and testing. We also expect to incur additional significant and recurring expenses as a publicly traded corporation, including costs associated with compliance under the Exchange Act, annual and quarterly reports to common stockholders, registrar and transfer agent fees, national stock exchange fees, audit fees, incremental director and officer liability insurance costs and director and officer compensation.

Impact of Covid-19

In March 2020, the World Health Organization declared the Coronavirus Disease 2019 (“Covid-19”) a global pandemic. The Covid-19 outbreak reached across the globe, resulting in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans intended to control the spread of the virus. While most of these measures have been relaxed around the world, future prevention and mitigation measures reinstituted in the event of repeat waves of the virus and any variants could have an adverse impact on global economic conditions and consumer confidence and spending, which could materially adversely affect the timing of demand, or users’ ability to pay, for our products and services.

In response to the Covid-19 pandemic, we took several precautions that may adversely impact employee productivity, such as requiring many office employees to work remotely, imposing travel restrictions, and temporarily closing office locations. In addition, we instituted additional procedures and precautions related to our crews on our FSRU vessels. As of December 31, 2022, most of these measures have been relaxed, but we continue to incur additional expenses as compared to pre-pandemic. We incurred incremental costs during the years ended December 31, 2022, 2021 and 2020, of approximately $2.7 million, $5.6 million and $4.2 million, respectively, related to these precautionary measures.

For additional information, see “Risk Factors—Risks Related to Our Business—Outbreaks of epidemic and pandemic diseases and governmental responses thereto could adversely affect our business.” and other risk factors included in the “Risk Factors” section in Item 1A that describe risks to us attributable to the Covid-19 pandemic.

How We Evaluate Our Operations

We operate in a single reportable segment. However, we use a variety of qualitative, operational and financial metrics to assess our performance and valuation. Among other measures, management considers each of the following in assessing our business:

Adjusted Gross Margin;

Adjusted EBITDA;

Adjusted EBITDAR; and

Capital Expenditures.

Adjusted Gross Margin

We use Adjusted Gross Margin, a non-GAAP financial measure, which we define as revenues less direct cost of sales and operating expenses, excluding depreciation and amortization, to measure our operational financial performance. Management believes Adjusted Gross Margin is useful because it provides insight on profitability and true operating performance excluding the implications of the historical cost basis of our assets. Our computation of Adjusted Gross Margin may not be comparable to other similarly titled measures of other companies, and you are cautioned not to place undue reliance on this information.

Adjusted EBITDA and Adjusted EBITDAR

Adjusted EBITDA is a non-GAAP financial measure included as a supplemental disclosure because we believe it is a useful indicator of our operating performance. We define Adjusted EBITDA as net income before interest, income taxes, depreciation and amortization, non-cash long-term incentive compensation expense and items such as charges and non-recurring expenses that management does not consider as part of assessing ongoing operating performance. In the second quarter of 2022, we revised the

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definition of Adjusted EBITDA to adjust for the impact of non-cash long-term incentive compensation expense, which we did not have prior to becoming a public company, and the early extinguishment of lease liability related to the acquisition of the Excellence vessel, as management believes such items do not directly reflect our ongoing operating performance.

Adjusted EBITDAR is a non-GAAP financial measure included as a supplemental disclosure because we believe it is a valuation measure commonly used by financial statement users to more effectively compare the results of our operations from period to period and against other companies without regard to our financing methods or capital structure. We define Adjusted EBITDAR as Adjusted EBITDA adjusted to eliminate the effects of rental expenses for vessels and other infrastructure, which are normal, recurring cash operating expenses necessary to operate our business. Following the anticipated purchase of the Sequoia in the second quarter of 2023, we will no longer incur rental expense for the Sequoia bareboat charter. We will cease reporting Adjusted EBITDAR in 2023.

We adjust net income for the items listed above to arrive at Adjusted EBITDA and Adjusted EBITDAR because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA and Adjusted EBITDAR should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. These measures have limitations as certain excluded items are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA and Adjusted EBITDAR. Adjusted EBITDAR should not be viewed as a measure of overall performance or considered in isolation or as an alternative to net income because it excludes rental expenses for vessels and other infrastructure, which are normal, recurring cash operating expenses that are necessary to operate our business. Our presentation of Adjusted EBITDA and Adjusted EBITDAR should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. For the foregoing reasons, each of Adjusted EBITDA and Adjusted EBITDAR has significant limitations that affect its use as an indicator of our profitability and valuation, and you are cautioned not to place undue reliance on this information.

Capital Expenditures

We incur capital expenditures as part of our regular business operations. Capital expenditures are costs incurred to expand our business operations, increase efficiency of business operations, extend the life of an existing asset, improve an asset’s capabilities, increase future service of an asset, repair existing assets in order to maintain their service capability, and provide upkeep required for regulatory compliance. Costs related to prospective projects are capitalized once it is determined to be probable that the related assets will be constructed.

The tables below reconcile the financial measures discussed above to the most directly comparable financial measure calculated and presented in accordance with GAAP:

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Consolidated Results of Operations

Years Ended December 31, 2022, 2021 and 2020

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Net income

Net income was $80.0 million for the year ended December 31, 2022, an increase of $38.8 million, as compared to $41.2 million for the year ended December 31, 2021. Net income was higher primarily due to direct margin earned on gas sales in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), which exceeded direct margin earned on gas sales that occurred in Bangladesh, China and Brazil during the year ended December 31, 2021 ($30.0 million), less interest expense – related party incurred in the year ended December 31, 2022 due to the acquisition of the Foundation Vessels ($21.1 million), less depreciation expense ($7.6 million), as discussed below, lower restructuring, transition and transaction expenses after the completion of our IPO in April 2022 ($7.1 million), and higher interest income received on cash balances invested in money market funds ($4.4 million), partially offset by fewer opportunities to sub-charter our available vessels to third parties during the year ended December 31, 2022 ($27.8 million), the early extinguishment of the Excellence vessel finance lease liability as part of the vessel acquisition ($21.8 million), an increase in general and administrative expenses ($19.0 million), as discussed below, increases in cost of revenue and vessel operating expenses ($16.5 million), primarily due to the commencement of the Bahia Terminal lease in the fourth quarter of 2021, foreign currency exchange losses ($7.2 million), and an increase in provision for income taxes ($7.2 million), as discussed below.

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Gross Margin and Adjusted Gross Margin

Gross Margin was $259.7 million for the year ended December 31, 2022, an increase of $59.3 million, as compared to $200.4 million for the year ended December 31, 2021. Adjusted Gross Margin was $357.0 million for the year ended December 31, 2022, an increase of $51.7 million, as compared to $305.3 million for the year ended December 31, 2021. Gross Margin and Adjusted Gross Margin were higher primarily due to direct margin earned on gas sales in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), which exceeded direct margin earned on gas sales that occurred in Bangladesh, China and Brazil during the year ended December 31, 2021 ($30.0 million), partially offset by fewer opportunities to sub-charter our available vessels to third parties during the year ended December 31, 2022 ($27.8 million) and increases in cost of revenue and vessel operating expenses ($16.5 million), primarily due to the commencement of the Bahia Terminal lease in the fourth quarter of 2021. Gross Margin was also higher due to less depreciation expense ($7.6 million), as discussed below.

Adjusted EBITDA and Adjusted EBITDAR

Adjusted EBITDA was $294.9 million for the year ended December 31, 2022, an increase of $32.8 million, as compared to $262.1 million for the year ended December 31, 2021. Our Adjusted EBITDAR was $331.1 million for the year ended December 31, 2022, an increase of $40.0 million, as compared to $291.1 million for the year ended December 31, 2021. Adjusted EBITDA and Adjusted EBITDAR were higher primarily due to direct margin earned on gas sales in Brazil, Finland and New England during the year ended December 31, 2022 ($121.0 million), which exceeded direct margin earned on gas sales that occurred in Bangladesh, China and Brazil during the year ended December 31, 2021 ($30.0 million), and higher interest income received on cash balances invested in money market funds ($4.4 million), partially offset by fewer opportunities to sub-charter our available vessels to third parties during the year ended December 31, 2022 ($27.8 million), an increase in general and administrative expenses ($19.0 million), as discussed below, increases in cost of revenue and vessel operating expenses ($16.5 million), primarily due to the commencement of the Bahia Terminal lease in the fourth quarter of 2021, and foreign currency exchange losses ($7.2 million).

For more information regarding our non-GAAP measures Adjusted Gross Margin, Adjusted EBITDA and Adjusted EBITDAR, and a reconciliation to their most comparable GAAP measures, see “—How We Evaluate Our Operations.”

FSRU and terminal services revenues

FSRU and terminal services revenues were $445.2 million for the year ended December 31, 2022, a decrease of $22.8 million, as compared to $468.0 million for the year ended December 31, 2021. FSRU and terminal services revenues were lower primarily due to fewer opportunities to sub-charter our available vessels to third parties during the first quarter of 2022, partially offset by benefits of the Exemplar lease beginning with Gasgrid Finland in the fourth quarter of 2022.

Gas sales revenues

Gas sales revenues were $2,027.8 million for the year ended December 31, 2022, an increase of $1,607.3 million, as compared to $420.5 million for the year ended December 31, 2021. The gas sales that occurred in the year ended December 31, 2022 related to our terminal operations in Brazil, Finland and New England, which exceeded gas sales to customers in Bangladesh, China and Brazil during the year ended December 31, 2021. Operations at the Bahia Terminal in Brazil began in December 2021, while operations at the Inkoo Terminal in Finland began in December 2022.

Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses was $209.2 million for the year ended December 31, 2022, an increase of $16.5 million, as compared to $192.7 million for the year ended December 31, 2021. The increase in cost of revenue and vessel operating expenses was primarily due to the additional cost of operations in Brazil as we began operations at the Bahia Terminal during the fourth quarter of 2021 ($19.4 million), which includes an increase in vessel and infrastructure rent expense ($7.2 million), as well as higher reimbursable local crewing costs in Argentina ($4.9 million), and higher maintenance at one of our terminal locations ($3.9 million), partially offset by decreased fuel and positioning costs ($11.7 million), which were higher in 2021 as part of servicing increased sub-charters.

Direct cost of gas sales

Direct cost of gas sales was $1,906.8 million for the year ended December 31, 2022, an increase of $1,516.3 million, as compared to $390.5 million for the year ended December 31, 2021. The increase was primarily due to gas sales that occurred in the year ended December 31, 2022 related to our terminal operations in Brazil, Finland and New England, partially offset by costs related to gas sales in Bangladesh, China and Brazil during the year ended December 31, 2021.

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Depreciation and amortization expenses

Depreciation and amortization expenses were $97.3 million for the year ended December 31, 2022, a decrease of $7.6 million, as compared to $104.9 million for the year ended December 31, 2021. Depreciation and amortization decreased primarily due to the release of our one conventional LNGC that was on a finance lease from short term charter operations in December 2021, partially offset by the acquisition of the Excelsior vessel.

Selling, general and administrative expenses

Selling, general and administrative expenses were $66.1 million for the year ended December 31, 2022, an increase of $19.0 million, as compared to $47.1 million for the year ended December 31, 2021. The increase was primarily due to incremental costs incurred in conjunction with our transition to a publicly traded company and additional business development activities.

Restructuring, transition and transaction expenses

Restructuring, transition and transaction expenses were $6.9 million for the year ended December 31, 2022, a decrease of $7.1 million, as compared to $14.0 million for the year ended December 31, 2021. The decrease was due to the completion of our IPO in April 2022.

Interest expense

Interest expense was $33.9 million for the year ended December 31, 2022, an increase of $2.0 million, as compared to $31.9 million for the year ended December 31, 2021. Interest expense increased primarily due to increases in LIBOR rates, partially offset by lower balances remaining on our finance leases and long-term debt.

Interest expense – related party

Interest expense – related party was $25.6 million for the year ended December 31, 2022, a decrease of $23.3 million, as compared to $48.9 million for the year ended December 31, 2021. Interest expense decreased primarily due to the acquisition of the Foundation Vessels.

Early extinguishment of lease liability on vessel acquisition

In the year ended December 31, 2022, we incurred a $21.8 million expense as a result of the difference between the consideration given to acquire the Excellence vessel and the historical finance lease liability.

Other income (expense), net

Other income (expense), net was $0.3 million for the year ended December 31, 2022, a decrease of $0.3 million, as compared to $0.6 million for the year ended December 31, 2021. The decrease was primarily due to foreign currency exchange losses related to our operations in Brazil and Argentina, partially offset by higher interest income received on cash balances invested in money market funds.

Provision for income taxes

The provision for income taxes for the years ended December 31, 2022 and 2021 was $28.3 million and $21.2 million, respectively. The increase was primarily attributable to the year-over-year change in the geographical distribution of income and the U.S. income tax incurred at the level of Excelerate Energy, Inc. since April 2022 of $3.6 million for the year ended December 31, 2022.

The effective tax rate for the years ended December 31, 2022 and 2021 was 26.1% and 33.9%, respectively. The decrease was primarily driven by the geographical distribution of income and the varying tax regimes of jurisdictions. Our effective tax rate was also impacted by the reduction of income before tax due to the loss on early extinguishment of the lease liability on acquisition of the Excellence vessel without a corresponding tax benefit, which increased our effective tax rate by 4.2% for the year ended December 31, 2022. Additionally, our effective tax rate was impacted by 3.3% for the year ended December 31, 2022 due to additional tax recorded since being subject to U.S. income taxes at the corporate level beginning in April 2022.

Excelerate is a corporate entity for U.S. federal and state income tax purposes. Excelerate’s accounting predecessor, EELP is treated as a pass-through entity for income tax purposes and has generally not been subject to U.S. federal and most state income taxes. Instead, EELP’s U.S. income is allocated to its Class A and Class B partners proportionate to their interest. As such, the Company’s provision for income tax includes U.S. taxes incurred at the corporate level beginning in April 2022.

The Company has international operations that are also subject to foreign income tax and U.S. corporate subsidiaries subject to U.S. federal tax. Therefore, our effective income tax rate is dependent on many factors, including the Company’s geographical distribution of income, a rate benefit attributable to the portion of the Company’s earnings not subject to corporate level taxes, foreign exchange impacts, and the impact of nondeductible items and foreign exchange impacts as well as varying tax regimes of jurisdictions.

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In one jurisdiction, the Company’s tax rate is significantly less than the applicable statutory rate as a result of a tax holiday that was granted. This tax holiday will expire in 2033 at the same time that our contract and revenue with our customer ends.

Net income attributable to non-controlling interest

Net income attributable to non-controlling interest was $55.1 million for the year ended December 31, 2022, an increase of $52.1 million, as compared to $3.0 million for the year ended December 31, 2021. The increase in net income attributable to non-controlling interest was primarily due to the addition of non-controlling interest related to owners of our Class B Common Stock after our IPO, partially offset by higher maintenance costs at one of our terminal locations.

Net loss attributable to non-controlling interest – ENE Onshore

Net loss attributable to non-controlling interest – ENE Onshore was $(1.4) million for the year ended December 31, 2022, a decrease of $1.6 million, as compared to $(3.0) million for the year ended December 31, 2021. Net loss attributable to non-controlling interest – ENE Onshore decreased primarily due to additional capacity sales revenue.

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Net income

Net income was $41.2 million for the year ended December 31, 2021, an increase of $8.3 million, as compared to $32.9 million for the year ended December 31, 2020. Net income was higher due to LNG and natural gas sales during the year ended December 31, 2021. No natural gas or LNG was sold during 2020 due to our decision to pursue long-term sales contracts in the New England market. During the year ended December 31, 2021, we pursued sales of natural gas opportunistically in the region while we sought to secure a long-term contract. These increases were partially offset by restructuring, transition and transaction expenses, as discussed below.

Gross Margin and Adjusted Gross Margin

Gross Margin was $200.4 million for the year ended December 31, 2021, an increase of $24.2 million, as compared to $176.2 million for the year ended December 31, 2020. Adjusted Gross Margin was $305.3 million for the year ended December 31, 2021, an increase of $24.9 million, as compared to $280.4 million for the year ended December 31, 2020. Gross Margin was higher primarily due to $30.0 million of direct margin earned on LNG and natural gas sales related to new opportunities in our terminal operations in Bangladesh and Brazil during the year ended December 31, 2021, and $11.4 million of additional revenues from seasonal regasification services provided in Argentina, which was partially offset by a $10.5 million increase in maintenance expenses in 2021 primarily due to repairs delayed due to Covid-19 in 2020, a $7.4 million increase in cost of revenue and vessel operating expenses related to the beginning of service at the Bahia Terminal, including the utilization of the Sequoia vessel in selling natural gas at the terminal, and $1.4 million in incremental vessel operating costs due to Covid-19 preventative measures.

Adjusted EBITDA and Adjusted EBITDAR

Our Adjusted EBITDA was $262.1 million and $240.4 million during the years ended December 31, 2021 and 2020, respectively. Our Adjusted EBITDAR was $291.1 million and $256.2 million in the years ended December 31, 2021 and 2020, respectively. The increase in our Adjusted EBITDA and Adjusted EBITDAR was primarily due to LNG and natural gas sales during the year ended December 31, 2021, as discussed above, partially offset by increases in selling, general and administrative expenses, as discussed below.

For more information regarding our non-GAAP measures Adjusted Gross Margin, Adjusted EBITDA and Adjusted EBITDAR, and a reconciliation to their most comparable GAAP measures, see “—How We Evaluate Our Operations.”

FSRU and terminal services revenues

FSRU and terminal services revenues were $468.0 million for the year ended December 31, 2021, an increase of $37.2 million, as compared to $430.8 million for the year ended December 31, 2020. Revenue increased primarily due to $11.4 million of additional revenues from seasonal regasification services provided in Argentina and additional revenues generated from a full year of Sequoia vessel operations in 2021, which entered service in June 2020, as well as higher charter hire rates for vessels not under long-term contracts as compared to reduced demand in 2020 as a result of Covid-19 related market conditions.

Gas sales revenues

Gas sales revenues were $420.5 million for the year ended December 31, 2021, as a result of LNG and natural gas sales that occurred in 2021 related to our terminal operations in Bangladesh and Brazil. No natural gas or LNG was sold during 2020 due to our decision to pursue long-term sales contracts in the New England market. During the year ended December 31, 2021, we pursued sales of natural gas opportunistically in the region while we sought to secure a long-term contract.

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Cost of revenue and vessel operating expenses

Cost of revenue and vessel operating expenses were $192.7 million for the year ended December 31, 2021, an increase of $42.2 million, as compared to $150.5 million for the year ended December 31, 2020. The variance in cost of revenues and vessel operating expenses was primarily driven by $15.6 million in operating and lease expense for the Sequoia vessel entering service in June 2020, increased sub-charters and maintenance expenses on our vessels in 2021 as compared to Covid-19 related service delays that occurred in 2020, and $1.4 million in incremental vessel operating costs due to Covid-19 preventative measures.

Direct cost of gas sales

Direct cost of gas sales was $390.5 million for the year ended December 31, 2021, as a result of LNG and natural gas sales during 2021. No LNG cargos or natural gas were sold in the year ended December 31, 2020.

Depreciation and amortization expenses

Depreciation and amortization expenses were $104.9 million for the year ended December 31, 2021, an increase of $0.7 million, as compared to $104.2 million for the year ended December 31, 2020. Depreciation and amortization were essentially flat.

Selling, general and administrative expenses

Selling, general and administrative expenses were $47.1 million for the year ended December 31, 2021, an increase of $4.1 million, as compared to $42.9 million for the year ended December 31, 2020. The increase was primarily a result of an increase in compensation expense, primarily due to increased management and leadership hiring, and an increase in consulting expenses related to new project development.

Restructuring, transition and transaction expenses

Restructuring, transition and transaction expenses of $14.0 million were incurred in 2021 due to consulting, legal, and audit services utilized as part of and in preparation for the IPO. No restructuring, transition and transaction expenses were incurred during the year ended December 31, 2020.

Interest expense

Interest expense was $31.9 million for the year ended December 31, 2021, a decrease of $5.6 million, as compared to $37.5 million for the year ended December 31, 2020. Interest expense decreased primarily due to lower balances remaining on our finance leases.

Interest expense – related party

Interest expense – related party was $48.9 million for the year ended December 31, 2021, a decrease of $3.1 million, as compared to $52.0 million for the year ended December 31, 2020. Interest expense – related party decreased primarily due to lower balances remaining on our finance leases, as well as lower average borrowings, primarily due to the settlement of the ENE Lateral Facility (as defined herein).

Other income (expense), net

Other income (expense), net was $0.6 million for the year ended December 31, 2021, an increase of $0.7 million, as compared to $(0.1) million for the year ended December 31, 2020. Other income (expense), net was essentially flat.

Provision for income taxes

The effective tax rate for the years ended December 31, 2021 and 2020 was 33.9% and 29.8%, respectively. The increase in the effective rate for the year ended December 31, 2021 was due to an audit settlement and uncertain tax positions recorded in the 2021 period. EELP is treated as a pass-through entity for income tax purposes and, as such, is not subject to U.S federal and most state income taxes. Instead, EELP’s U.S. income tax activity is allocated to individuals and entities affiliated with EELP. The Company also has international operations that are subject to foreign income tax requirements and U.S. corporate subsidiaries subject to U.S. federal tax. Therefore, our effective income tax rate is dependent on many factors, including the Company’s geographical distribution of income, a rate benefit attributable to the portion of the Company’s earnings not subject to corporate level taxes, and the impact of nondeductible items. In one jurisdiction, the Company’s tax rate is significantly less than the applicable statutory rate as a result of a tax holiday that was granted. This tax holiday will expire in 2033 at the same time as our contract and revenue with our customer ends.

Net income attributable to non-controlling interest

Net income attributable to non-controlling interest was $3.0 million for the year ended December 31, 2021, an increase of $0.4 million, as compared to $2.6 million for the year ended December 31, 2020. Net income attributable to non-controlling interest was higher in 2021 primarily due to lower interest expense.

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Net loss attributable to non-controlling interest – ENE Onshore

Net loss attributable to non-controlling interest – ENE Onshore was $(3.0) million for the year ended December 31, 2021, a decrease of $5.5 million, as compared to $(8.5) million for the year ended December 31, 2020. Net loss attributable to non-controlling interest – ENE Onshore was lower in 2021 primarily due to additional capacity sales revenue and lower interest expense on its debt and the ENE Onshore Merger in October 2022.

Liquidity and Capital Resources

Based on our cash positions, cash flows from operating activities and borrowing capacity on our debt facilities, we believe we will have sufficient liquidity for the next 12 months for ongoing operations, planned capital expenditures, other investments, debt service obligations, payment of tax distributions and our announced and expected quarterly dividends, as described in Part II, Item 5—Our Dividend and Distribution Policy, the first of which were paid on September 7, 2022. For more information regarding our planned dividend payments, see Note 13 – Equity. As of December 31, 2022, we had $516.7 million in unrestricted cash and cash equivalents.

Our proceeds from the IPO in April 2022 were approximately $416.2 million, after deducting underwriting discounts and commissions, but before deducting IPO-related expenses of $7.6 million. Approximately $50.0 million of the IPO net proceeds were used to fund, in part, EELP's purchase of the Foundation Vessels. The remaining proceeds are expected to be used to fund our growth strategy, working capital, and other general corporate purposes.

During the third quarter of 2021, we signed a lease on an LNG terminal in Bahia, Brazil from Petrobras, and in December 2021, we started importing LNG and selling regasified natural gas to Petrobras. In December 2022, we began selling LNG and natural gas to European customers via the Inkoo Terminal in Finland. In addition to Petrobras and customers in Europe, we have plans to sell regasified natural gas to other downstream customers, including in Brazil and Bangladesh. Some of these inventory purchases could potentially exceed cash on hand at certain times. We plan to fund any cash shortfalls with borrowings under the EE Revolver (as defined herein). For more information regarding the EE Revolver, see Note 10 – Long-term debt to the Consolidated Financial Statements. Management believes the EE Revolver will provide sufficient liquidity to execute contractual purchase obligations. In the event sufficient funds were not available under the EE Revolver, we would seek alternative funding sources.

We have historically funded our business, including meeting our day-to-day operational requirements, repaying our indebtedness and funding capital expenditures, through debt financing, capital contributions and our operating cash flows as discussed below. We expect that our future principal uses of cash will also include additional capital expenditures to fund our growth strategy, pay income taxes and make distributions from EELP to fund income taxes, fund our obligations under the TRA, and pay cash dividends and distributions. Any determination to pay dividends to holders of our common stock and distributions to holders of EELP’s Class B interests will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, covenant compliance, restrictions in our existing and any future debt and other factors that our board of directors deems relevant. In the future we may enter into arrangements to grow our business or acquire or invest in complementary businesses which could decrease our cash and cash equivalents and increase our cash requirements. As a result of these and other factors, we could use our available capital resources sooner than expected and may be required to seek additional equity or debt.

Cash Flow Statement Highlights

Years ended December 31, 2022, 2021 and 2020

Operating Activities

Cash flows used in operating activities increased by $83.5 million for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to:

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a $445.1 million decrease in accounts receivable, primarily related to collections of receivables related to Brazil natural gas sales;

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a $160.5 million increase in deferred revenues, primarily related to collection of prepayments related to Brazil natural gas sales;

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a $38.8 million increase in net income;

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•
a $21.8 million early extinguishment of lease liability on vessel acquisition in the year ended December 31, 2022, as described in “— Consolidated Results of Operations—Net income”;

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a $14.1 million decrease in inventory related cash outflows, primarily due to purchases related to Bahia terminal startup in December 2021 exceeding LNG purchases related to Brazil natural gas sales activity and Inkoo Terminal activity in Finland during the year ended December 31, 2022; and

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partially offset by a $600.0 million decrease in accounts payable and accrued liabilities, primarily due to decreased outstanding LNG cargo purchase payments related to Brazil natural gas sales as of December 31, 2022.

Cash flows provided by operating activities increased by $32.6 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020, primarily due to:

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a $334.0 million increase in accounts payable due to December 2021 LNG purchases for December 2021 and January 2022 natural gas sales;

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an $8.3 million increase in net income, as described in “—Consolidated Results of Operations—Net income”;

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partially offset by a $65.6 million increase in inventories due to December 2021 LNG purchases made in preparation for January 2022 natural gas sales; and

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partially offset by a $244.7 million increase in accounts receivables primarily due to December 2021 natural gas sales.

Investing Activities and Capital Expenditures

Cash flows used in investing activities were comprised of capital expenditures made for the purchases of property and equipment, which increased by $83.2 million for the year ended December 31, 2022, as compared to the same period in 2021. The increase in cash used for purchases of property and equipment was primarily due to the purchase of the Foundation Vessels, our first installment payment on the Newbuild Agreement, and our power barge project in Albania.

Cash flows used in investing activities decreased by $5.2 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020. The decrease was primarily due to decreased vessel drydocking spending in 2021.

Financing Activities

Cash flows provided by financing activities increased by $465.3 million for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to $412.1 million of net IPO proceeds, a $78.2 million decrease in net cash outflows to Kaiser-Francis Management Company, L.L.C. (“KFMC”) from EELP on a promissory note that was terminated in November 2021 and a $28.3 million decrease in finance lease payments, partially offset by $25.0 million in cash payments made as part of the early extinguishment of a lease liability related to the IPO transaction, $26.7 million of net payments on our other long-term debt, and a $4.8 million increase in deferred financing costs paid.

Cash flows used in financing activities increased by $92.7 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020, primarily due to $88.5 million of net borrowings by KFMC from EELP under related party note receivables.

Debt Facilities

Revolving Credit Facility and Term Loan Facility

On April 18, 2022, EELP entered into a senior secured revolving credit agreement (“Credit Agreement”), by and among EELP, as borrower, Excelerate, as parent, the lenders party thereto, the issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which the lenders and issuing banks thereunder made available the EE Revolver, including a letter of credit sub-facility, to EELP. The EE Revolver enabled us to borrow up to $350 million over a three-year term originally set to expire in April 2025. As of December 31, 2022, the Company had issued $40.0 million in letters of credit under the EE Revolver and was in compliance with the covenants under its debt facilities. As a result of the EE Revolver’s financial ratio covenants and after taking into account the outstanding letters of credit issued under the facility, all of the $310 million of undrawn capacity was available for additional borrowings as of December 31, 2022.

Also, on April 18, 2022, the Company borrowed under the EE Revolver, on the closing day of such facility, and used the proceeds to repay the KFMC Note in full. The KFMC Note was terminated in connection with such repayment.

On March 17, 2023, EELP entered into an amended and restated senior secured credit agreement (“Amended Credit Agreement”), by and among EELP, as borrower, Excelerate, as parent, the lenders party thereto, the issuing banks party thereto and Wells Fargo Bank, N.A., as administrative agent. The Amended Credit Agreement provides for, among other things (i) a new $250 million term loan facility (the “Term Loan Facility” and, together with the EE Revolver, the “EE Facilities”), (ii) an extension of the maturity date of the EE Revolver, (iii) an increase in the maximum consolidated total leverage by 0.50x to 3.50x, provided that, if the aggregate value of all unsecured debt is equal to or greater than $250 million, maximum consolidated total leverage increases to 4.25x, and (iv) collateral

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vessel maintenance coverage to be not less than the greater of (i) $750 million and (ii) 130% of the sum of the total credit exposure under the Amended Credit Agreement. Proceeds from the Term Loan Facility are intended to be used for the acquisition of the FSRU Sequoia. The commitments under the Term Loan Facility expire on May 1, 2023, if the acquisition of the Sequoia does not occur by such date. The EE Facilities mature in March 2027. Proceeds from the EE Revolver are intended to be used for letters of credit, working capital, and other general corporate purposes.

Borrowings under the EE Revolver bear interest at a per annum rate equal to the term SOFR reference rate for such period plus an applicable margin, which applicable margin is based on EELP’s consolidated total leverage ratio as defined and calculated under the Credit Agreement. The unused portion of the EE Revolver is subject to an unused commitment fee calculated at a rate per annum ranging from 0.375% to 0.50% based on EELP's consolidated total leverage ratio.

The Amended Credit Agreement contains customary representations, warranties, covenants (affirmative and negative, including maximum consolidated total leverage ratio, minimum consolidated interest coverage ratio, and collateral vessel maintenance coverage covenants), and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of amounts borrowed under the EE Facilities.

Experience Vessel Financing

In December 2016, we entered into a sale leaseback agreement with a third party to provide $247.5 million of financing for the Experience vessel. Due to our requirement to repurchase the vessel at the end of the term, the transaction was accounted for as a failed sale leaseback (a financing transaction). Under failed sale leaseback accounting, we are deemed the owner of the vessel and will continue to recognize the vessel on our consolidated balance sheets, with the proceeds received recorded as a financial obligation. Through December 2021, we made quarterly principal payments of $5.0 million and paid interest at the three-month LIBOR plus 4.2%. The original loan matured in 2026 when the remaining balance of $49.5 million was payable. In December 2021, the agreement was amended to extend the term to December 2033, reduce the interest margin to 3.25% and reduce the quarterly principal payments to $3.1 million. After the final quarterly payment in December 2033, there will be no remaining balance due. We incurred debt issuance costs of $1.2 million related to the amendment, which will be amortized over the life of the loan. Debt issuance costs of $6.0 million related to the original loan are presented as a direct deduction from the debt and have been amortized over the life of the original loan. The agreement contains certain security rights related to the Experience vessel in the event of default.

Our vessel financing loan has certain financial covenants as well as customary affirmative and negative covenants, which we must maintain to remain compliant with the loan. We must maintain a minimum equity of $500.0 million, a maximum debt to equity ratio of 3.5 to 1 and a minimum cash and cash equivalents balance including loan availability of $20.0 million. Our agreement also requires that a three-month debt service reserves be funded and that the value of the vessel equal or exceed 110% of the remaining amount outstanding, in addition to other affirmative and negative covenants customary for vessel financings. The financing also requires the vessel to carry typical vessel marine insurances.

2017 Bank Loans

On June 23, 2017, we entered into two loan agreements with external banks (the “2017 Bank Loans”) to finance the MLNG terminal in Bangladesh. The first arrangement allowed us to borrow up to $32.8 million. The loan accrues interest at the 6-month LIBOR plus 2.42%. Payments are due semi-annually with an original scheduled maturity date of April 15, 2030. We partially prepaid the loan during 2019. As a result of this prepayment, the loan matures on October 15, 2029. The debt issuance costs of $1.3 million are presented as a direct reduction from the debt liability and are amortized over the life of the loan.

The second arrangement allowed us to draw funds up to $92.8 million. The loan accrues interest at the 3-month LIBOR plus 4.5%. Payments are due quarterly with an original scheduled maturity date of April 15, 2030. We partially prepaid the loan during 2019. As a result of this prepayment, the loan matures on October 15, 2029. Debt issuance costs of $4.8 million are presented as a direct deduction from the debt liability and are amortized over the life of the loan. The agreement contains certain security rights related to MLNG terminal assets and project contracts in the event of default.

The 2017 Bank Loans require compliance with certain financial covenants, as well as customary affirmative and negative covenants associated with limited recourse project financing facilities. The loan agreements also require that a 6-month debt service reserve amount be funded and that an off-hire reserve amount be funded monthly to cover operating expenses and debt service while the vessel is away during drydock major maintenance. The loan agreements also require that the MLNG terminal and project company be insured on a stand-alone basis with property insurance, liability insurance, business interruption insurance and other customary insurance policies. The respective project company must have a quarterly debt service coverage ratio of at least 1.10 to 1. In 2021, a waiver was obtained for a non-financial covenant. The waiver allows the Company to obtain a higher insurance deductible than the $0.3 million deductible originally required by the lenders since such deductible was not available to the Company during the 2020 and 2021 renewals. An additional waiver was obtained in August 2022 to also allow a higher deductible under the insurance policy renewal and to address additional non-financial exclusions.

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Exquisite Vessel Financing

In June 2018, we entered into a sale leaseback agreement with the Nakilat JV, our equity method investment, to provide $220.0 million of financing via a fifteen-year lease agreement for the Exquisite vessel at 7.73%. The lease agreement has a symmetrical put and call option at the end of the original term or, optionally, two five-year extensions with symmetrical put and call options after each extension. The agreement did not meet the terms for recognition of a sale leaseback transaction and instead was treated as financing due to the terms of the transaction. The agreement contains certain security rights related to the Exquisite vessel in the event of default.

KFMC Note

On November 9, 2018, EELP entered into a promissory note with KFMC, an affiliate of Kaiser as lender, which allowed EELP to draw funds up to $100 million (as amended, restated, supplemented or otherwise modified, the “KFMC Note”). The KFMC Note was amended on November 17, 2020 to (i) extend the final payment date from December 31, 2020 to December 31, 2022, (ii) increase the per annum interest rate from LIBOR plus 1.5% to LIBOR plus 1.55% and (iii) make certain revisions to prepayment conditions. The KFMC Note was further amended and restated in its entirety on September 29, 2021 to (i) make certain changes to the final payment date, including removing KFMC’s ability to demand payment, and extending the final payment date to December 31, 2023 and (ii) allow EELP to draw funds at EELP’s discretion without prior approval by KFMC. The KFMC Note was further amended on October 1, 2021 to increase the maximum aggregate principal amount from $100 million to $250 million. In April 2022, the Company borrowed under the EE Revolver and used the proceeds to repay the KFMC Note in full. The KFMC Note was terminated in connection with such repayment, as discussed in Note 10 – Long-term debt.

KFMC-ENE Onshore Note

In September 2021, in connection with the Northeast Gateway Contribution, ENE Lateral assigned to KFMC all of its right, title and interest to receive payment under a note with ENE Onshore (the “KFMC-ENE Onshore Note”), which assignment was made in partial satisfaction of the amounts owed by ENE Lateral under a promissory note it entered into with KFMC in December 2015 (as amended, restated, supplemented or otherwise modified, the “ENE Lateral Facility”). As a result of such assignment, ENE Onshore was obligated to pay to KFMC all amounts under the KFMC-ENE Onshore Note. In November 2021, ENE Onshore received an equity contribution sufficient to allow it to remit payment to KFMC of the then-outstanding KFMC-ENE Onshore Note balance, and KFMC and ENE Onshore subsequently entered into an amended and restated note allowing a maximum commitment of $25 million. The KFMC-ENE Onshore Note was settled in full and canceled in connection with the ENE Onshore Merger.

As of December 31, 2022, the Company was in compliance with the covenants under its debt facilities.

Foundation Vessels Purchase

In exchange for (i) 7,854,167 shares of Class A Common Stock with a fair market value of $188.5 million, (ii) a cash payment of $50.0 million and (iii) $21.5 million of estimated future payments under the TRA, EELP purchased from Maya Maritime LLC, a wholly-owned subsidiary of the Foundation, all of the issued and outstanding membership interests in the Foundation Vessels. In 2018, EELP entered into an agreement with a customer to lease the Excellence vessel with the vessel transferring ownership to the customer at the conclusion of the agreement for no additional consideration. Historically, EELP, as a lessor, has accounted for the Excellence vessel contract with our customer as a sales-type lease in the consolidated balance sheet in accordance with Accounting Standards Codification 842, Leases. The Excellence vessel will continue to be accounted for as a sales-type lease and thus did not result in an adjustment to property and equipment. The difference between the consideration given to acquire the Excellence and the historical finance lease liability resulted in a $21.8 million early extinguishment of lease liability loss on our consolidated statements of income.

Other Contractual Obligations

Operating Leases

We lease a vessel, terminal and offices in various locations under noncancelable operating leases. As of December 31, 2021, we had future minimum lease payments of $120.2 million. As of December 31, 2022, we had future minimum lease payments totaling $88.6 million and are committed to $37.6 million in year one, $47.8 million for years two and three, $1.9 million for years four and five and $1.3 million thereafter.

Finance Leases

Certain enforceable vessel charters and pipeline capacity agreements are classified as finance leases, and the right-of-use assets are included in property and equipment. As of December 31, 2021, we had future minimum lease payments totaling $784.8 million. As of December 31, 2022, we had future minimum lease payments totaling $307.3 million and are committed to $33.2 million in payments in year one, $66.5 million for years two and three, $66.5 million for years four and five, and $141.0 million thereafter.

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Newbuild Agreement Commitments

As part of the Newbuild Agreement, we currently expect to pay approximately $330 million, subject to adjustment. Related payments are due in five installments with the final installment due concurrently with the delivery of the vessel, which is expected in 2026. During the year ended December 31, 2022, we made the first installment payment of approximately $30.0 million. Our future payment commitments related to the Newbuild Agreement are expected to be approximately $50.0 million in 2024 and $250.0 million in 2025-2026.

Tax Receivable Agreement

In connection with the IPO, we entered into the TRA with the TRA Beneficiaries. The TRA will provide for payment by us to the TRA Beneficiaries of 85% of the amount of the net cash tax savings, if any, that we are deemed to realize as a result of our utilization of certain tax benefits resulting from (i) certain increases in the tax basis of assets of EELP and its subsidiaries resulting from exchanges of EELP partnership interests in the future, (ii) certain tax attributes of EELP and subsidiaries of EELP (including the existing tax basis of assets owned by EELP or its subsidiaries and the tax basis of certain assets purchased from the Foundation) that exist as of the time of the IPO or may exist at the time when Class B interests of EELP are exchanged for shares of Class A Common Stock, and (iii) certain other tax benefits related to us entering into the TRA, including tax benefits attributable to payments that we make under the TRA. See “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate Energy, Inc—Tax Receivable Agreement” in the Prospectus for more information about the TRA.

The payments that we will be required to make under the TRA, including those made if we elected to terminate the agreement early, have the potential to be substantial. Based on certain assumptions, including no material changes in the relevant tax law and that we earn sufficient taxable income to realize the full tax benefits that are the subject of the TRA, we expect that future payments to the TRA Beneficiaries (not including Excelerate) will equal $76.7 million in the aggregate, although the actual future payments to the TRA Beneficiaries will vary based on the factors discussed in “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate Energy, Inc—Tax Receivable Agreement” in the Prospectus and estimating the amount of payments that may be made under the TRA is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors and future events.

The TRA payment forecasted to be made in 2023 as of December 31, 2022, is $3.7 million. In addition, payments we make under the TRA will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return. If EE Holdings were to have exchanged all of its EELP interests as of the balance sheet date, we would recognize a liability for payments under the TRA of approximately $420.4 million, assuming (i) that EE Holdings exchanged all of its EELP interests using EE’s December 31, 2022 closing market price of $25.05 per share of Class A Common Stock, (ii) no material changes in relevant tax law, (iii) a constant combined effective income tax rate of 21% and (iv) that we have sufficient taxable income in each year to realize on a current basis the increased depreciation, amortization and other tax benefits that are the subject of the TRA. The actual future payments to the TRA Beneficiaries will vary, and estimating the amount and timing of payments that may be made under the TRA is by its nature imprecise, as the calculation of amounts payable depends on a variety of factors and future events. We expect to receive distributions from EELP in order to make any required payments under the TRA. However, we may need to incur debt to finance payments under the TRA to the extent such distributions or our cash resources are insufficient to meet our obligations under the TRA as a result of timing discrepancies or otherwise.

Venture Global SPA

In February 2023, we executed a 20-year LNG sales and purchase agreement with Venture Global LNG. Under the Venture Global SPA, Excelerate will purchase 0.7 MT per annum of LNG on a FOB basis from the Plaquemines LNG facility in Plaquemines Parish, Louisiana.

Sequoia Purchase Option

In March 2023, we exercised our option to purchase the FSRU Sequoia for a purchase price of $265 million (the “Sequoia Purchase”), which is currently under a bare boat charter with a third party until mid-2025. We expect to close the Sequoia Purchase in April 2023, with payment of the purchase price due on closing. As discussed above, we intend to use proceeds from the Term Loan Facility to fund the Sequoia Purchase.

Off Balance Sheet Arrangements

Before Excelerate’s IPO, EELP, certain of its subsidiaries and other affiliates of Kaiser were guarantors to a Kaiser revolving loan facility, and EELP provided a first lien against one of EELP’s vessels to collateralize this facility. The facility was a committed line of credit of $600 million with a third-party bank that would have expired on September 30, 2022 (the “Kaiser Credit Line”). EELP utilized the Kaiser Credit Line to issue letters of credit or bank guarantees to counterparties to guarantee its performance. In connection with the IPO, the first lien against an EELP vessel and other collateral and guarantees provided by EELP and its subsidiaries was released by the

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lender under the Kaiser Credit Line and certain credit support previously provided to EELP by Kaiser under the Kaiser Credit Line was replaced with credit support under the EE Revolver.

Critical Accounting Policies and Estimates

The accounting policies and estimates discussed below are considered by management to be critical to an understanding of our financial statements as their application requires the most significant judgments from management in estimating matters for financial reporting that are inherently uncertain. For additional information about our accounting policies and estimates, see the Note 2 – Summary of significant accounting policies to the Consolidated Financial Statements.

Leases

We account for leases under the provisions of Accounting Standards Codification (“ASC”) 842, Leases. In the application of ASC 842 for leases in which we are the lessee, certain estimates and management judgments are required such as determining the useful life of a leased asset, the discount rate used in calculating the present value of lease payments, and when leases have extension or termination options that are likely to be exercised. When we are the lessor, estimates are required in allocating the contract consideration between the lease component and non-lease components on a relative standalone selling price basis.

Lessee Accounting

As of the lease commencement date, we recognize a liability for our lease obligation, initially measured at the present value of lease payments not yet paid, and an asset for our right to use the underlying asset, initially measured equal to the lease liability and adjusted for lease payments made at or before lease commencement, lease incentives, and any initial direct costs. The discount rate used to determine the present value of the lease payments is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment.

The initial recognition of the lease obligation and right-of-use asset excludes short-term leases. Short-term leases are leases with an original term of one year or less, excluding those leases with an option to extend the lease for greater than one year or an option to purchase the underlying asset that the lessee is deemed reasonably certain to exercise. We have elected, as an accounting policy, not to apply the recognition requirements to short-term leases. Instead, we may recognize the lease payments in the statements of income on a straight-line basis over the lease term.

We have certain lease agreements that provide for the option to extend or terminate early, which was evaluated on each lease to arrive at the lease term. If we were reasonably certain to exercise a renewal or termination option, this period was factored into the lease term. As of December 31, 2022, we did not have any lease agreements with residual value guarantees or material restrictions or covenants.

Lessor Accounting

We determined that our time charter contracts contain a lease and a performance obligation for the provision of time charter and other regasification services. Leases are classified based upon defined criteria either as sales-type, direct financing, or operating leases by the lessor.

For those leases classified as sales-type, the underlying asset is derecognized and the net investment in the lease is recorded. We have determined that these contracts contain a lease component for the use of the vessel and non-lease components relating to operation of the vessels. We have allocated the contract consideration between the lease component and non-lease components on a relative standalone selling price basis. We utilize a combination of approaches to estimate the standalone selling prices when the directly observable selling price is not available by utilizing information available such as market conditions and prices, entity-specific factors, and internal estimates when market data is not available. Given that there are no observable standalone selling prices for either of these two components, judgment is required in determining the standalone selling price of each component.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. New assets, modifications to existing assets which improve the asset’s operational efficiency, capacity or useful life, and our finance leases are assigned a useful life. Useful lives of property and equipment are determined using various assumptions, including our expected use of our assets and the supply of and demand for LNG and natural gas in the markets we serve, normal wear and tear of assets, and the expected extent and frequency of maintenance. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, less an estimated residual value.

Asset retirement obligations (“ARO”)

We recognize liabilities for retirement obligations associated with tangible long-lived assets when there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The fair value of a liability for an ARO is

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recognized in the period which it is incurred, if a reasonable estimate of fair value can be made. In order to estimate the fair value, we use judgments and assumptions for factors including the existence of legal obligations for an ARO; technical assessments of the assets; discount rates; inflation rates; and estimated amounts and timing of settlements. The offsetting asset retirement cost is recorded as an increase to the carrying value of the associated property and equipment on the consolidated balance sheets and depreciated over the estimated useful life of the asset. In periods subsequent to the initial measurement of an ARO, we recognize period-to-period changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows.

Income taxes

We are a corporation for U.S. federal and state income tax purposes. EELP, is treated as a pass-through entity for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax at the entity level. As part of our income tax accounting process, we are required to make certain assumptions and estimations.

We record valuation allowances to reflect the estimated amount of certain deferred tax assets that are more likely to not be realized. In making such a determination, we evaluate a variety of factors, including our operating history, accumulated deficit, and the existence of taxable or deductible temporary differences and reversal periods.

The effect of tax positions is recognized only if those positions are more likely than not of being sustained. Conclusions reached regarding tax positions are continually reviewed based on ongoing analyses of tax laws, regulations, and interpretations thereof. To the extent that our 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. We recognize the tax benefit from an uncertain tax provision only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the tax position.

Tax receivable agreement

In connection with the IPO, we entered into the TRA with the TRA Beneficiaries. The TRA will provide for payment by us to the TRA Beneficiaries of 85% of the amount of the net cash tax savings, if any, that we are deemed to realize as a result of our utilization of certain tax benefits. The amount and timing of future payments to the TRA Beneficiaries will vary as the calculation depends on a variety of factors and future events. Potential future actions taking by the Company, such as mergers or other forms of business combinations that would constitute a change in control, may influence the timing and amount of payments we make under the TRA in a manner that does not correspond to our use of the corresponding tax benefits.

Recent Accounting Pronouncements

Refer to Note 2 – Summary of significant accounting policies to the notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for information regarding recently issued accounting pronouncements.

Implications of Being an Emerging Growth Company

As a company with less than $1.07 billion in revenue during 2021, Excelerate qualified as an emerging growth company (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For so long as Excelerate remained an EGC, it was permitted, and elected, to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not EGCs. These exemptions included:

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being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

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not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting under the Sarbanes-Oxley Act, for up to five years or until we no longer qualify as an EGC;

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not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

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reduced disclosure obligations regarding executive compensation pursuant to the rules applicable to smaller reporting companies, which means we do not have to include a compensation discussion and analysis and certain other disclosures regarding our executive compensation; and

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exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and obtaining stockholder approval of any golden parachute payments not previously approved.

As Excelerate has exceeded the $1.235 billion in annual revenue threshold during the current fiscal year, we ceased to be an EGC on December 31, 2022. As a result of ceasing EGC status, we are required to comply with certain requirements listed above in our

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Annual Report for the year ending December 31, 2022. Prior to December 31, 2022, Excelerate took advantage of some reduced reporting burdens in its filings.