Revenue recognition

9 Months Ended

Sep. 30, 2021

Revenue recognition [Abstract]

Revenue recognition

6. Revenue recognition

Operating revenue includes revenue from sales of LNG and natural gas as well as outputs from the Company’s natural gas-fueled power generation facilities, including power and steam. Other revenue includes revenue for development services as well as interest income from the Company’s finance leases and other revenue. The table below summarizes the balances in Other revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Development services revenue	$	25,264	$	51,974	$	125,924	$	79,540
Interest income and other revenue		12,347		1,021		22,617		2,872
Total other revenue	$	37,611	$	52,995	$	148,541	$	82,412

Development services revenue recognized in the three and nine months ended September 30, 2021 included $25,264 and $114,654, respectively, for the customer’s use of natural gas as part of commissioning their assets.

Under most customer contracts, invoicing occurs once the Company’s performance obligations have been satisfied, at which point payment is unconditional. As of September 30, 2021 and December 31, 2020, receivables related to revenue from contracts with customers totaled $126,783 and $76,431, respectively, and were included in Receivables, net on the condensed consolidated balance sheets, net of current expected credit losses of $130 and $98, respectively. Other items included in Receivables, net not related to revenue from contracts with customers represent leases which are accounted for outside the scope of ASC 606 and receivables associated with reimbursable costs.

The Company has recognized contract liabilities, comprised of unconditional payments due or paid under the contracts with customers prior to the Company’s satisfaction of the related performance obligations. The performance obligations are expected to be satisfied during the next 12 months, and the contract liabilities are classified within Other current liabilities on the condensed consolidated balance sheets. Contract assets are comprised of the transaction price allocated to completed performance obligations that will be billed to customers in subsequent periods. The contract liabilities and contract assets balances as of September 30, 2021 and December 31, 2020 are detailed below:

	September 30, 2021		December 31, 2020
Contract assets, net - current	$	7,310	$	4,029
Contract assets, net - non-current		38,554		30,434
Total contract assets, net	$	45,864	$	34,463
Contract liabilities	$	2,371	$	8,399
Revenue recognized in the year from:
Amounts included in contract liabilities at the beginning of the year	$	6,340	$	6,542

Contract assets are presented net of expected credit losses of $530 and $376 as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021 and December 31, 2020, contract assets was comprised of $45,513 and $6,821 of unbilled receivables, respectively, that represent unconditional rights to payment only subject to the passage of time.

The Company has recognized costs to fulfill a contract with a significant customer, which primarily consist of expenses required to enhance resources to deliver under the agreement with the customer. As of September 30, 2021, the Company has capitalized $11,132, of which $604 of these costs is presented within Other current assets and $10,528 is presented within Other non-current assets on the condensed consolidated balance sheets. As of December 31, 2020, the Company had capitalized $11,276, of which $588 of these costs was presented within Other current assets and $10,688 was presented within Other non-current assets on the condensed consolidated balance sheets. In the first quarter of 2020, the Company began delivery under the agreement and started recognizing these costs on a straight-line basis over the expected term of the agreement.

Transaction price allocated to remaining performance obligations

Some of the Company’s contracts are short-term in nature with a contract term of less than a year. The Company applied the optional exemption not to report any unfulfilled performance obligations related to these contracts.

The Company has arrangements in which LNG, natural gas or outputs from the Company’s power generation facilities are sold on a “take-or-pay” basis whereby the customer is obligated to pay for the minimum guaranteed volumes even if it does not take delivery. The price under these agreements is typically based on a market index plus a fixed margin. The fixed transaction price allocated to the remaining performance obligations under these arrangements represents the fixed margin multiplied by the outstanding minimum guaranteed volumes. The Company expects to recognize this revenue over the following time periods. The pattern of recognition reflects the minimum guaranteed volumes in each period:

Period	Revenue
Remainder of 2021	$	67,761
2022		474,995
2023		515,235
2024		511,719
2025		503,099
Thereafter		8,446,430
Total	$	10,519,239

For all other sales contracts that have a term exceeding one year, the Company has elected the practical expedient in ASC 606 under which the Company does not disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. For these excluded contracts, the sources of variability are (a) the market index prices of natural gas used to price the contracts, and (b) the variation in volumes that may be delivered to the customer. Both sources of variability are expected to be resolved at or shortly before delivery of each unit of LNG, natural gas, power or steam. As each unit of LNG, natural gas, power or steam represents a separate performance obligation, future volumes are wholly unsatisfied.

Lessor arrangements

The Company’s vessel charters of LNG carriers and FSRUs can take the form of operating or finance leases. Property, plant and equipment subject to vessel charters accounted for as operating leases is included within Vessels within Note 14 Property, plant and equipment, net. The following is the carrying amount of property, plant and equipment that is leased to customers under operating leases:

	September 30, 2021			December 31, 2020
Property, plant and equipment	$	1,274,293		$	18,394
Accumulated depreciation		(20,128	)		(932	)
Property, plant and equipment, net	$	1,254,165		$	17,462

The components of lease income from vessel operating leases for the three and nine months ended September 30, 2021 were as follows:

	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
Operating lease income	$	74,069	$	136,095
Variable lease income		3,096		4,466
Total operating lease income	$	77,165	$	140,561

The Company’s charter of the Nanook to CELSE and certain equipment leases provided in connection with the supply of natural gas or LNG are accounted for as finance leases.

The Company recognized interest income of $11,607 and $21,288 for the three months and nine months ended September 30, 2021, respectively, related to the finance lease of the Nanook included within Other revenue in the condensed consolidated statements of operations and comprehensive loss.  The Company recognized revenue of $1,491 and $2,656 for the three months and nine months ended September 30, 2021, respectively, related to the operation and services agreement within Vessel charter revenue in the condensed consolidated statements of operations and comprehensive loss.

As of September 30, 2021, there were outstanding balances due from CELSE of $6,183, of which $4,210 is recognized in Receivables, net and a loan to CELSE of $1,973 is recognized in Prepaid expenses and other current assets, net on the condensed consolidated balance sheets. CELSE is an affiliate due to the equity method investment held in CELSE’s parent, CELSEPAR, and as such, these transactions and balances are related party in nature.

The following table shows the expected future lease payments as of September 30, 2021, for the remainder of 2021 through 2025 and thereafter:

	Future cash receipts
	Financing Leases		Operating Leases
Remainder of 2021	$	12,478	$	64,827
2022		49,951		244,239
2023		50,616		144,375
2024		51,442		105,572
2025		51,876		25,961
Thereafter		1,104,102		-
Total minimum lease receivable	$	1,320,465	$	584,974
Unguaranteed residual value		107,000
Gross investment in sales-type lease	$	1,427,465
Less: Unearned interest income		818,758
Less: Current expected credit losses		1,546
Net investment in leased vessel	$	607,161
Current portion of net investment in leased asset	$	3,499
Non-current portion of net investment in leased asset		603,662