CORRESP 1 filename1.htm Document
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November 16, 2021

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Energy & Transportation
Washington, DC 20549
Attention: Messrs. Wojciechowski and Hiller


Re: Golar LNG Limited
Form 20-F for the Fiscal Year ended December 31, 2020
Filed April 22, 2021
File No. 000-50113

Dear Messrs. Wojciechowski and Hiller,

Set forth below are the responses of Golar LNG Limited (the “Company”, “we,” “us” or “our”), to comments received from the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) by letter dated November 3, 2021, with respect to our response dated September 17, 2021 to your letter dated September 3, 2021 (“Response”) related to our Form 20-F for the Fiscal Year ended December 31, 2020, File No. 000-50113, filed with the Commission on April 22, 2021 (the “Form 20-F”).
For your convenience, each response is prefaced by the exact text of the Staff’s corresponding comment in bold, italicized text. All references to page numbers and captions correspond to the Form 20-F for the Fiscal Year ended December 31, 2020 unless otherwise specified.

Form 20-F for the Fiscal Year ended December 31, 2020
Operating and Financial Review and Prospects Operating Results, page 60

1.We note that you have proposed disclosure revisions in response to prior comment one that include reconciliations between consolidated net loss and Adjusted EBITDA, although your proposed revisions utilize both GAAP and non-GAAP labels for the same segment performance measures; remove the Adjusted EBITDA totals from your tabulation of segment results without explanation, and do not include a discussion of the reconciling items or consolidated results of operations.

Please further expand your disclosures to address the economic activity that is reflected in the consolidated measure of net profit/(loss), particularly where such activity is not covered by the discussion of segment activity. This should be provided for the consolidated entity, in advance of your discussion of operating results for the segments. The totals in the segment tabulations may be retained to correspond with your disclosures on page F-34, and you may reposition the table of Other Operating Results on page 64 to accompany and facilitate your discussion of the consolidated results of operations.

The non-GAAP reconciliations proposed in Appendix 1 should be further revised to either eliminate the measures of profit/(loss) by segment, since this is a GAAP label and the allocations necessary to compute the corresponding GAAP measures have not been made to the segments (i.e. in which case, the reconciliations should be retained for the consolidated measures only), or to include the allocations necessary to yield GAAP measures of profit/(loss) for the reportable operating segments.


Company response: The Company has proposed our updates to address the Staff’s comment in Appendix 1. The Company respectfully requests that these amended disclosures be provided by the Company on a prospective basis for all future filings on Form 20-F and in the Company’s unaudited interim financial reports filed on Form 6-K commencing with our unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2021, which we intend to file on Form 6-K on November 18, 2021.

Vinson & Elkins LLP Attorneys at Law
Austin Dallas Dubai Houston London Los Angeles New York
Richmond Riyadh San Francisco Tokyo Washington

1001 Fannin Street, Suite 2500
Houston, TX 77002-6760
Tel +1.713.758.2222 Fax +1.713.758.2346 velaw.com
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November 16, 2021 Page 2    
Financial Statements
Note 6 - Segment Information, page F-33

2.We note that you have proposed disclosure revisions in response to prior comment three that include reconciliations of the segment performance measures to consolidated profit or loss before income taxes, although your proposed revisions utilize both GAAP and non-GAAP labels for the same segment performance measures.

The segment disclosures proposed in Appendix 2 should be further revised to either eliminate the measures of profit/(loss) by segment since this is a GAAP label and the allocations necessary to compute the corresponding GAAP measures have not been made to the segments (i.e. the reconciliations would be limited to the consolidated measures of Adjusted EBITDA, as cross tabulated from the segment details), or to include the allocations necessary to yield GAAP measures of profit/(loss) for the segments.

Company response: The Company has proposed our updates to address the Staff’s comment in Appendix 2. In all future filings on Form 20-F and in the Company’s unaudited consolidated financial statements filed on Form 6-K, the Company will modify the disclosures to those proposed in Appendix 2, commencing with our unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2021, which we intend to file on Form 6-K on November 18, 2021.

*    *    *    *    *




Please direct any questions that you have with respect to the foregoing or if any additional supplemental information is required by the Staff, please contact David P. Oelman at (713) 758-3708 of Vinson & Elkins L.L.P., counsel to the Company.


Very truly yours,


By: /s/ David P. Oelman
Vinson & Elkins LLP Attorneys at Law
Austin Dallas Dubai Houston London Los Angeles New York
Richmond Riyadh San Francisco Tokyo Washington

1001 Fannin Street, Suite 2500
Houston, TX 77002-6760
Tel +1.713.758.2222 Fax +1.713.758.2346 velaw.com

Appendix 1: Proposed changes to Form 20-F

Extracts from the Company’s Form 20-F, commencing on page 58 to page 72. Changes indicated in red font shaded in gray. Emphasis on Adjusted EBITDA is removed by deleting the bold font and double underlining.

-------------------------------------------------------------------------------------------------------------------------------

Important Financial and Operational Terms and Concepts

We use a variety of financial and operational terms and concepts when analyzing our performance. These include the following:

Liquefaction services revenue. [No changes].

Operating revenues (including revenue from collaborative arrangement). [No changes].

Voyage, charterhire expenses and commission expenses (including expenses from collaborative arrangement). [No changes].

Vessel operating expenses. [No changes].

Administrative expenses. [No changes].

Project development expenses. [No changes].

Adjusted EBITDA. Adjusted EBITDA is calculated by taking net income before interest, tax, equity in net profit or loss of affiliates, unrealized mark-to-market movements on the oil derivative instrument, depreciation and amortization, impairment of long-term assets and gain on disposal of long-lived assets. Adjusted EBITDA is a financial measure used by management and investors to assess our financial and operating performance. Management believes that Adjusted EBITDA assists management and investors by increasing comparability of our performance from period to period and against the performance of other companies. Management believes Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above from net profit/loss in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company and within respective industries depending upon accounting methods and book values of assets, capital structure, and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss as determined in accordance with GAAP as an indicator of our operating performance. Certain items excluded from Adjusted EBITDA 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 computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA is useful to investors as a widely followed measure of operating performance.

Appendix 1

Interest expense and interest income. [No changes].

Equity in net earnings or losses of affiliates. [No changes].

Non-Controlling Interest. [No changes].

Inflation and Cost Increases

[No changes].

A. Operating Results

Year ended December 31, 2020, compared with the year ended December 31, 2019

In 2020, we changed the way in which we report and measure our reportable segments. The main driver of the change is the alignment of presentation and contents of financial information provided to our chief operating decision maker (our Board of Directors). We believe that Adjusted EBITDA assists management and investors by increasing the comparability of our performance from period to period and against the performance of other companies in our industry that provide Adjusted EBITDA information. The following details the operating results for our reportable segments for the years ended December 31, 2020 and 2019.

In connection with our year-end audit process, and subsequent to our February 25, 2021 earnings release related to the fourth quarter of 2020, we received the audited financial statements of our lessor VIE entities and have reclassified $25.2 million of restricted cash against the lessor VIE’s short-term debt and reclassified $2.3 million of accrued interest from non-current liabilities to current liabilities. In addition, we have recognized $1.3 million of equity in net losses from affiliates and $0.9 million in our other comprehensive income, resulting into a net decrease of $0.5 million to our Investment in affiliates.

Appendix 1

A reconciliation of net profit /(loss) to Adjusted EBITDA is as follows:

December 31,
(in thousands of $)20202019Change% Change
Net profit / (loss)(167,930)(122,375)(45,555)37 %
Income taxes9811,024(43)(4)%
Profit / (loss) before income taxes(166,949)(121,351)(45,598)38 %
Equity in net losses of affiliates1
176,52745,799130,728285 %
Other financial items, net1,5525,522(3,970)(72)%
Loss on derivative instruments52,42338,04414,37938 %
Interest expense69,354103,124(33,770)(33)%
Interest income(1,572)(10,479)8,907(85)%
Gain on disposal of long-lived asset(5,682)—(5,682)(100)%
Unrealized loss on oil derivative45,10039,0906,01015 %
Impairment of long-term assets—42,098(42,098)(100)%
Depreciation and amortization107,923113,033(5,110)(5)%
Adjusted EBITDA278,696254,88023,7969 %

(1) Please refer to the individual reportable segments below for discussions on Equity in net losses of affiliates.

[The below items have been shifted from pages 64 - 66 in the Form 20-F]

Income taxes: [No changes].
Other financial items, net: [No changes].
Loss on derivative instruments: [No changes].
Interest expense: [No changes].
Interest income: [No changes].
Gain on disposal of long-live asset: [No changes].
Unrealized loss on oil derivative: [No changes].
Impairment of long-term assets: [No changes].
Depreciation and amortization: [No changes].

Appendix 1

The following details the operating results, Adjusted EBITDA and equity in net losses of affiliates for our reportable segments for the years ended December 31, 2020 and 2019:
December 31, 2020December 31, 2019
(in thousands of $)ShippingFLNGPowerCorporate and otherTotalShippingFLNGPowerCorporate and otherTotal
Total operating revenues191,881 226,061 — 20,695 438,637 208,766 218,096 — 21,888 448,750 
Vessel operating expenses(57,326)(52,104)— 504 (108,926)(66,502)(55,284)— 496 (121,290)
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)(12,634)— — — (12,634)(38,053)(788)— — (38,841)
Administrative expenses(2,211)(1,672)— (31,428)(35,311)(2,220)(1,526)— (48,425)(52,171)
Project development expenses(112)(2,793)— (5,986)(8,891)(964)(3,173)— (853)(4,990)
Realized gain on oil derivative instrument— 2,539 — — 2,539 — 13,089 — — 13,089 
Other operating income/(losses)3,262 — — — 3,262 13,295 (2,962)— — 10,333 
Adjusted EBITDA122,860172,031—(16,215)278,676114,322167,452—(26,894)254,880
Equity in net losses of affiliates— — (39,158)(137,369)(176,527)— — (23,234)(22,565)(45,799)

Shipping segment
December 31,
(in thousands of $, except average daily TCE)20202019Change% Change
Total operating revenues191,881 208,766 (16,885)(8)%
Vessel operating expenses(57,326)(66,502)9,176 14 %
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)(12,634)(38,053)25,419 67 %
Administrative expenses(2,211)(2,220)9 — %
Project development expenses(112)(964)852 88 %
Other operating income3,262 13,295 (10,033)(75)%
Adjusted EBITDA122,860 114,322 8,538 7 %
Other Financial Data:
Average daily TCE (1) (to the closest $100)
48,900 44,400 4,500 10 %
Calendar days less scheduled off-hire days3,669 3,840 (171)(4)%
(1) TCE is a non-GAAP financial measure. For a reconciliation of TCE, please see “Item 3. Key Information-A. Selected Financial Data."
Appendix 1


Total operating revenues: [No changes].
Average daily TCE: [No changes].
Vessel operating expenses: [No changes].
Voyage, charterhire and commission expenses: [No changes].
Project development expenses: [No changes].
Other operating income: [No changes].

FLNG segment
December 31,
(in thousands of $)20202019Change% Change
Total operating revenues226,061 218,096 7,965 4 %
Vessel operating expenses(52,104)(55,284)3,180 (6)%
Voyage expenses— (788)788 (100)%
Administrative expenses(1,672)(1,526)(146)10 %
Project development expenses(2,793)(3,173)380 (12)%
Realized gains on oil derivative instrument2,539 13,089 (10,550)(81)%
Other operating losses— (2,962)2,962 (100)%
Adjusted EBITDA172,031 167,452 4,579 3 %

Total operating revenues: [No changes].
Vessel operating expenses: [No changes].
Voyage expenses: [No changes].
Project development expenses: [No changes].
Realized gain on oil derivative instrument: [No changes].
Other operating losses: [No changes].

Power segment
[No changes given Adjusted EBITDA is not presented here].

Corporate and other segment
December 31,
(in thousands of $, except average daily TCE)20202019Change% Change
Total operating revenues20,695 21,888 (1,193)(5)%
Vessel operating expenses504 496 8 (2)%
Administrative expenses(31,428)(48,425)16,997 35 %
Project development expenses(5,986)(853)(5,133)(602)%
Adjusted EBITDA(16,215)(26,894)10,679 (40)%
Equity in net losses of affiliates(137,369)(22,565)(114,804)509 %
Total operating revenues: [No changes].
Vessel operating expenses: [No changes].
Administrative expenses: [No changes].
Appendix 1

Project development expenses: [No changes].
Equity in net earnings of affiliates: [No changes].

Other operating results:

The following details our other consolidated results for the years ended December 31, 2020 and 2019:
December 31,
(in thousands of $)20202019Change% Change
Depreciation and amortization(107,923)(113,033)5,110 5 %
Impairment of long-term assets— (42,098)42,098 100 %
Unrealized loss on oil derivative(45,100)(39,090)(6,010)(15)%
Gain on disposal of long lived asset5,682 — 5,682 — %
Interest income1,572 10,479 (8,907)(85)%
Interest expense(69,354)(103,124)33,770 33 %
Losses on derivative instruments(52,423)(38,044)(14,379)(38)%
Other financial items, net(1,552)(5,522)3,970 72 %
Net income attributable to non-controlling interests(105,627)(89,581)(16,046)(18)%



Appendix 1

Year ended December 31, 2019, compared with the year ended December 31, 2018

A reconciliation of net profit /(loss) to Adjusted EBITDA is as follows:

December 31,
(in thousands of $)20192018Change% Change
Net profit / (loss)(122,375)(168,214)45,839(27)%
Income taxes1,0241,267(243)(19)%
Profit / (loss) before income taxes(121,351)(166,947)45,596(27)%
Equity in net losses of affiliates1
45,799157,636(111,837)(71)%
Other financial items, net5,5221,4814,041273 %
Loss on derivative instruments38,04430,5417,50325 %
Interest expense103,124101,9081,2161 %
Interest income(10,479)(10,133)(346)3 %
Unrealized loss on oil derivative39,0909,97029,120292 %
Impairment of long-term assets42,098—42,098100 %
Depreciation and amortization113,03393,68919,34421 %
Adjusted EBITDA254,880218,14536,73517 %

(1) Please refer to the individual reportable segments below for discussions on Equity in net losses of affiliates.

[The below items have been shifted from pages 71 - 72 in the Form 20-F]

Income taxes: [No changes].
Other financial items, net: [No changes].
Loss on derivative instruments: [No changes].
Interest expense: [No changes].
Interest income: [No changes].
Unrealized loss on oil derivative: [No changes].
Impairment of long-term assets: [No changes].
Depreciation and amortization: [No changes].

Appendix 1

The following details the operating results, Adjusted EBITDA and equity in net losses of affiliates for our reportable segments for the years ended December 31, 2019 and 2018:
December 31, 2019December 31, 2018
(in thousands of $)ShippingFLNGPowerCorporate and otherTotalShippingFLNGPowerCorporate and otherTotal
Total operating revenues208,766 218,096 — 21,888 448,750 278,770 127,625 — 24,209 430,604 
Vessel operating expenses(66,502)(55,284)— 496 (121,290)(67,897)(29,363)— 400 (96,860)
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)(38,053)(788)— — (38,841)(104,397)(1,429)— — (105,826)
Administrative expenses(2,220)(1,526)— (48,425)(52,171)(2,221)(140)— (49,181)(51,542)
Project development expenses(964)(3,173)— (853)(4,990)— (16,570)— (5,120)(21,690)
Realized gains on oil derivative instrument— 13,089 — — 13,089 — 26,737 — — 26,737 
Other operating income/(losses)13,295 (2,962)— — 10,333 50,740 (14,018)— — 36,722 
Adjusted EBITDA114,322167,452—(26,894)254,880154,99592,842— (29,692)218,145
Equity in net losses of affiliates--(23,234)(22,565)(45,799)-(2,047)(16,913)(138,676)(157,636)

Shipping segment

December 31,
(in thousands of $, except average daily TCE)20192018Change% Change
Total operating revenues208,766 278,770 (70,004)(25)%
Vessel operating expenses(66,502)(67,897)1,395 (2)%
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)(38,053)(104,397)66,344 (64)%
Administrative expenses(2,220)(2,221)1 — %
Project development expenses(964)— (964)(100)%
Other operating gains13,295 50,740 (37,445)(74)%
Adjusted EBITDA114,322 154,995 (40,673)(26)%
Other Financial Data:
Average daily TCE (1) (to the closest $100)
44,400 43,700 700 2 %
Calendar days less scheduled off-hire days3,840 3,987 (147)(4)%
(1) TCE is a non-GAAP financial measure. For a reconciliation of TCE rates, please see “Item 3. Key Information-A. Selected Financial Data."
Appendix 1


Total operating revenues: [No changes].
Average daily TCE: [No changes].
Vessel operating expenses: [No changes].
Voyage, charterhire and commission expenses: [No changes].
Project development expenses: [No changes].
Other operating gains: [No changes].

FLNG segment

December 31,
(in thousands of $)20192018Change% Change
Total operating revenues218,096 127,625 90,471 71 %
Vessel operating expenses(55,284)(29,363)(25,921)88 %
Voyage expenses(788)(1,429)641 (45)%
Administrative expenses(1,526)(140)(1,386)990 %
Project development expenses(3,173)(16,570)13,397 (81)%
Realized gains on oil derivative13,089 26,737 (13,648)(51)%
Other operating losses(2,962)(14,018)11,056 (79)%
Adjusted EBITDA167,452 92,842 74,610 80 %
Equity in net losses of affiliates—(2,047)2,047(100)%

Total operating revenues: [No changes].
Vessel operating expenses: [No changes].
Voyage expenses: [No changes].
Administrative expenses: [No changes].
Project development expenses: [No changes].
Realized gain on oil derivative instrument: [No changes].
Other operating losses: [No changes].
Equity in net losses of affiliates: [No changes].

Power segment
[No changes given Adjusted EBITDA is not presented here].


Appendix 1

Corporate and other segmentDecember 31,
(in thousands of $, except average daily TCE)20192018Change% Change
Total operating revenues21,888 24,209 (2,321)(10)%
Vessel operating expenses496 400 96 24 %
Administrative expenses(48,425)(49,181)756 (2)%
Project development expenses(853)(5,120)4,267 (83)%
Adjusted EBITDA(26,894)(29,692)2,798 (9)%
Equity in net losses of affiliates(22,565)(138,676)116,111 (84)%

Total operating revenues: [No changes].
Vessel operating expenses: [No changes].
Administrative expenses: [No changes].
Project development expenses: [No changes].
Equity in net earnings of affiliates: [No changes].

Other operating results:

The following details our other consolidated results for the years ended December 31, 2019 and 2018:
December 31,
(in thousands of $)20192018Change% Change
Depreciation and amortization(113,033)(93,689)(19,344)21 %
Impairment of long-term assets(42,098)— (42,098)100 %
Unrealized loss on oil derivative(39,090)(9,970)(29,120)292 %
Interest income10,479 10,133 346 3 %
Interest expense(103,124)(101,908)(1,216)1 %
Losses on derivative instruments(38,044)(30,541)(7,503)25 %
Other financial items, net(5,522)(1,481)(4,041)273 %
Net income attributable to non-controlling interests(89,581)(63,214)(26,367)42 %
Appendix 1

Appendix 2: Proposed changes to Form 20-F1

Extracts from the Company’s Form 20-F, commencing on page F-33 to page F-36. Changes indicated in red font shaded in gray.
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6.SEGMENT INFORMATION

[No changes to introductory text preceding tables].

Management has therefore concluded that we provide four distinct services and operate in the following four reportable segments:

•Shipping – This segment is based on the business activities of the transportation of LNG carriers. We operate and subsequently charter out LNG carriers on fixed terms to customers.
•FLNG – This segment is based on the business activities of FLNG vessels or projects. We convert LNG carriers into FLNG vessels and subsequently charter them out to customers. We currently have one operational FLNG, the Hilli, one undergoing conversion, the Gimi (note 15), and one LNG carrier earmarked for conversion, the Gandria.
•Power – This segment is based on the business activities of power generation infrastructure. We have a 50/50 joint venture, Hygo, with private equity firm Stonepeak. Hygo offers integrated LNG based downstream solutions, through the ownership and operation of FSRUs and associated terminal and power generation infrastructure.
•Corporate and other – This segment is based on the business activities of vessel management and administrative services and our corporate overhead costs.

A reconciliation of net profit / (loss) to Adjusted EBITDA is as follows:

December 31,
(in thousands of $)202020192018
Net profit / (loss)(167,930)(122,375)(168,214)
Income taxes9811,0241,267
Profit / (loss) before income taxes(166,949)(121,351)(166,947)
Depreciation and amortization107,923113,03393,689
Impairment of long-term assets—42,098—
Unrealized loss on oil derivative45,10039,0909,970
Gain on disposal of long-lived asset(5,682)——
Interest income(1,572)(10,479)(10,133)
Interest expense69,354103,124101,908
Loss on derivative instruments52,42338,04430,541
Other financial items, net1,5525,5221,481
Equity in net losses of affiliates176,52745,799157,636
Adjusted EBITDA278,676254,880218,145
1 Requested to be included on a prospective basis.

Appendix 2



Year Ended December 31, 2020
(in thousands of $)ShippingFLNGPower
Corporate and other (1)
Total
Statement of Operations:
Total operating revenues191,881 226,061 — 20,695 438,637 
Vessel operating expenses(57,326)(52,104)— 504 (108,926)
Voyage, charterhire and commission expenses(12,634)— — — (12,634)
Administrative expenses(2,211)(1,672)— (31,428)(35,311)
Project development expenses(112)(2,793)— (5,986)(8,891)
Realized gains on oil derivative instrument (note 2)— 2,539 — — 2,539 
Other operating income3,262 — — — 3,262 
Adjusted EBITDA122,860 172,031 — (16,215)278,676 
Equity in net losses of affiliates——(39,158)(137,369)(176,527)

Year Ended December 31, 2019
(in thousands of $)ShippingFLNGPower
Corporate and other (1)
Total
Statement of Operations:
Total operating revenues208,766 218,096 — 21,888 448,750 
Vessel operating expenses(66,502)(55,284)— 496 (121,290)
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)(38,053)(788)— — (38,841)
Administrative expenses(2,220)(1,526)— (48,425)(52,171)
Project development expenses(964)(3,173)— (853)(4,990)
Realized gains on oil derivative instrument (note 2)— 13,089 — — 13,089 
Other operating income/(losses)13,295 (2,962)— — 10,333 
Adjusted EBITDA114,322 167,452 — (26,894)254,880 
Equity in net losses of affiliates——(23,234)(22,565)(45,799)
Appendix 2


Year Ended December 31, 2018
(in thousands of $)ShippingFLNGPower
Corporate and other (1)
Total
Statement of Operations:
Total operating revenues278,770 127,625 — 24,209 430,604
Vessel operating expenses(67,897)(29,363)— 400 (96,860)
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)(104,397)(1,429)— — (105,826)
Administrative expenses(2,221)(140)— (49,181)(51,542)
Project development expenses— (16,570)— (5,120)(21,690)
Realized gains on oil derivative instrument (note 2)— 26,737 — — 26,737
Other operating income/(losses)50,740 (14,018)— — 36,722
Adjusted EBITDA154,995 92,842 — (29,692)218,145
Equity in net losses of affiliates—(2,047)(16,913)(138,676)(157,636)
(1) Includes inter-segment eliminations arising from vessel and administrative management fees revenue between segments.

[No further changes to this note].












Appendix 2