Delaware | | | 4924 | | | 87-2878691 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
| | With copies to: | | | ||
Andrew L. Fabens Hillary H. Holmes Gibson, Dunn & Crutcher LLP 811 Main Street, Suite 3000 Houston, TX 77002 (346) 718-6600 | | | Alisa Newman Hood Executive Vice President, General Counsel and Secretary Excelerate Energy, Inc. 2445 Technology Forest Blvd., Level 6 The Woodlands, TX 77381 (832) 813-7100 | | | Michael Kaplan Pedro Bermeo Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10022 (212) 450-4000 |
Large accelerated filer ☐ | | | Accelerated filer ☐ |
Non-accelerated filer ☒ | | | Smaller reporting company ☐ |
| | Emerging growth company ☒ |
PROSPECTUS | | |
| | Per Share | | | Total | |
Initial public offering price | | | $ | | | $ |
Underwriting discounts and commissions(1) | | | $ | | | $ |
Proceeds, before expenses, to us | | | $ | | | $ |
(1) | See “Underwriting (Conflicts of Interest)” for a description of all underwriting compensation payable in connection with this offering. |
Barclays | | | J.P. Morgan | | | Morgan Stanley |
SMBC Nikko | | | Raymond James | | | Stephens Inc. |
Tudor, Pickering, Holt & Co. | | | BOK Financial Securities, Inc. |
| | Page | |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| |
• | LNG-to-power developers. In many of our markets, we compete with other LNG-to-power companies, including New Fortress Energy and AES. Our investment strategy is focused on leveraging our FSRU expertise and local operational experience and relationship development to drive the expansion of incremental |
• | Large LNG producers. When compared to major LNG producers such as Qatargas, Shell, ExxonMobil, BP and Total Energies, we believe we are better positioned to open and expand new markets given our expertise in the downstream portion of the LNG value chain. Our focus is on helping LNG producers expand the reach of their LNG supply beyond their traditional markets, resulting in less price pressure and better portfolio diversification. In close collaboration with Qatargas, we succeeded in bringing regasified LNG to Pakistan and Bangladesh, which triggered a dramatic displacement of coal fired plants from the government’s energy plans. Additionally, we are collaborating with ExxonMobil on a feasibility study in Albania of an opportunity for them to provide LNG and for us to develop the LNG terminal, power generation facilities and pipeline interconnections necessary to make the importation of LNG viable, illustrating how we can provide value to LNG producers while capturing integrated markets downstream. |
• | FSRU / LNG carrier owners. As the owner and operator of the largest FSRU fleet employed for regasification in the industry, we compete with FSRU and LNG carrier (“LNGC”) owners such as New Fortress Energy (following its acquisition of Hygo Energy Transition and Golar LNG Partners), Hoegh LNG and GasLog. We distinguish ourselves by providing customers the ability to expand our service as their energy demands increase. This flexible approach, focused on optimizing services by swapping smaller FSRUs for larger ones, performing technical upgrades and offering seasonal service when required, fosters trust and long-term relationships with our customers. We believe the fundamentals supporting the FSRU business model require operators to focus on reliability, value and service, combined with disciplined expansion and growth. |
• | Experienced LNG Leader and Proven Ability to Execute. We are an admired player within the LNG industry with significant experience across the value chain. Our experienced team and proven LNG solutions, including the industry's largest FSRU fleet employed for regasification, more than 2,200 STS transfers of LNG with over 40 LNG operators and the development or operation of 15 LNG import terminals, make us a market leader and a trusted partner for countries who seek to improve their access to energy. We have nearly two decades of development, construction and operational experience, making us one of the most accomplished, reliable and capable LNG companies in the industry. Our team’s in-depth experience and local presence enable us to support energy hubs by sourcing and aggregating LNG from the global market for delivery downstream, ensuring the long-term stability, reliability, and independence of customers’ energy supply. |
• | Positioned to Meet Growing Global Demand for Cleaner Energy. According to the International Energy Agency’s (“IEA”) most recent semi-annual Electricity Market Report, global electricity demand rebounded strongly in 2021, growing by close to 6% over the prior year, and is expected to increase by approximately 3% annually in 2022 and 2023. With the demand for power generation growing worldwide, direct access to diverse, affordable and reliable energy sources such as LNG has become a critical enabler for economic growth and improving the quality of life across the globe. LNG provides an abundant, competitive and cleaner energy source to meet the world’s growing demand for power. It is also an efficient means to displace coal, which is a higher carbon intensity fuel compared to natural gas. Despite its advantages, LNG access is not readily available in many emerging markets due to the complexity of LNG import projects. We have an established reputation for developing and operating complex LNG solutions and are a trusted operator with a strong track record of bringing reliability, resiliency and flexibility to energy systems. |
• | Full-Service, Integrated LNG Business Model Provides Competitive Advantage. As market dynamics and the energy needs of customers have evolved over time, we embraced the opportunity to expand beyond our FSRU business. Today, we are addressing the need for increased access to LNG with our fully integrated business model that manages the LNG supply chain from procurement until final delivery to end users. We plan to help our customers meet their growing energy demand by providing an array of products, including LNG terminal services, natural gas supply procurement and distribution, LNG-to-power projects |
• | Well-Established FSRU Business Supported by Dependable Revenue Base. We own and operate the largest FSRU fleet employed for regasification in the industry. The success of our well established FSRU business is highlighted by our ability to secure long-term, take-or-pay contracts that generate consistent revenue and cash flow with minimal exposure to commodity price volatility. Our ability to swap FSRUs between projects makes our baseline revenue more predictable and minimizes redeployment risk. Further, we minimize the initial commitments for integrated offers through the initial use of existing, smaller capacity FSRUs while our customers’ markets evolve. Most of our existing customers have benefited from this scalability, which has resulted in better project returns and higher customer loyalty. This strength has allowed us to capture downstream markets such as Brazil, where our successful FSRU services with Petrobras opened the door to accessing gas sales through the lease of the Bahia Regasification Terminal from Petrobras. Our profitable FSRU and LNG marketing and supply businesses also provide us with valuable connectivity to global downstream markets. With our expansive global presence, we are well positioned to deliver integrated natural gas and power solutions, giving our customers access to cleaner, reliable and affordable energy. |
• | Understanding of LNG Market Dynamics Allows for Portfolio Optimization. We leverage our expertise and understanding of LNG market dynamics to create significant value though our LNG marketing and supply business. Our worldwide market access and ability to buy LNG from major LNG producers and traders gives us the chance to capture additional value via portfolio optimization and provides incremental cash flow. Even more importantly, our access to diverse, uncorrelated markets, including New England and Brazil, generates valuable arbitrage opportunities. We are structuring our business to be able to maximize this extra value from LNG supply to gas sales agreements (“GSA”) and power purchase agreements (“PPA”). Our strategy of integrating LNG supply, natural gas sales and terminal operations, gives us the ability to optimize our FSRU fleet utilization. |
• | Proven Management Team. Our management team has experience in all aspects of the LNG value chain and a strong balance of technical, commercial, operational, financial, legal and management skills. Steven Kobos, our President and Chief Executive Officer, has over 27 years of experience working on complex energy and infrastructure development projects and general maritime operations, specifically LNG shipping, FSRUs, chartering of vessels, shipbuilding contracts, operational agreements and related project finance and tax matters, and he has helped establish Excelerate as a growing and profitable international energy company. Daniel Bustos, our Executive Vice President and Chief Commercial Officer, has over 24 years of experience leading commercial development of oil and gas projects across the globe, with a particular focus on LNG, and is responsible for the commercial development of our LNG import projects, expansion of our customer base and the buildout of our global network of regional offices. Dana Armstrong, our Executive Vice President and Chief Financial Officer, provides oversight of all global financial reporting, financial planning and analysis, accounting, treasury, tax, financial systems and internal controls and has led both public and private multinational companies within the energy and biotechnology industries over her 25-year career. Calvin Bancroft, our Executive Vice President and Chief Operating Officer, has over 40 years of experience in the shipping industry, with recognized expertise in maritime security, chartering, supply chain management and operational logistics. Alisa Newman Hood, our Executive Vice President and General Counsel, has 20 years of worldwide legal, government relations and energy policy experience. Amy Thompson, our Executive Vice President and Chief Human Resources Officer, has over 22 years of human resources experience in global oil field services organizations and has held various leadership roles in the United States and the Middle East. |
• | Continue to develop our existing, diversified regasification business, supported by our large purpose-built FSRU fleet. Our current markets are essential to maintaining our solid foundation of revenues and providing new opportunities for downstream growth. Our persistent market presence helps |
• | Pursue opportunities downstream of existing markets. With established terminals, existing markets provide opportunities for us to structure end-to-end natural gas supply products and cleaner power solutions for our customers. We expect the organic growth of our business to be accompanied by strategic acquisitions for new or existing projects, in order to enhance our growth trajectory. As we integrate new infrastructure assets downstream of our floating LNG terminals, we will be required to make investments in new products and technologies to ensure that we are positioned for success in a lower-carbon energy future. We anticipate that increasing global demand for electricity generation, more efficient access to natural gas and decarbonization initiatives will be the primary drivers of opportunity, and we intend to diversify our product portfolio responsibly and in a manner that reinforces our broader goals of improving access to cleaner, more affordable and reliable energy, creating sustainable growth and combatting climate change. Our local teams will be key to expanding and diversifying our commercial, technical and financial expertise in our existing markets. |
• | Utilize our global presence to enter new, growing markets. We plan to use our existing markets as a springboard into new countries and regions. Our ability to cultivate meaningful partnerships and successfully acquire equity interests in projects will be a determining factor in how quickly we are able to |
• | Create a sizable, diversified LNG procurement portfolio. Our expansion downstream will offer us the opportunity to establish valuable access to a worldwide network of natural gas markets. Our network of supply and charter contracts and reputation with major LNG producers provide us with ample opportunities to grow our LNG portfolio on competitive terms. This diversified portfolio will give us the opportunity to better manage the typical uncertainties of local demand (weather seasonality, economic cycles, availability of renewables, etc.), while capturing arbitrage opportunities. For example, we have already demonstrated the value of accessing the New England market in a flexible way. With the addition of new market access points in Asia, Europe, Africa and South America, we can capture value from our LNG procurement portfolio, above the margins generated in individual markets. Finally, this LNG portfolio will help further enhance our competitive edge for new opportunities, allowing us to offer more flexible and cost-effective products to new customers. |
• | Maintain our disciplined investment philosophy. As we grow our business, we are committed to maintaining our disciplined investment philosophy and prudent approach to project development. We have established a proven track record of investing in the right projects which has resulted in higher project returns and consistent earnings results. We also strive to negotiate the terms of our contracts in a manner that seeks to minimize any potential commodity risk. It is our aim to have an industry leading portfolio of high-return growth opportunities that will support sustainable and profitable growth for years to come. We expect our contract portfolio to evolve over time to include long-term contracts as well as shorter-term agreements that will create opportunities to capture additional upside. |
• | our ability to enter into contracts with customers and our customers’ failure to perform their contractual obligations; |
• | customer termination rights in our contracts; |
• | the risks inherent in operating our FSRUs and other LNG infrastructure assets; |
• | the technical complexity of our FSRUs and LNG import terminals and related operational problems; |
• | cancellations, time delays, unforeseen expenses and other complications while developing our projects; |
• | our inability to develop a project successfully and our customers’ failure to fulfill their payment obligations to us following our capital investment in a project; |
• | the failure of our regasification terminals and other facilities to operate as expected or be completed; |
• | our need for substantial expenditures to maintain and replace, over the long-term, the operating capacity of our fleet, regasification terminals and associated assets, pipelines and downstream infrastructure; |
• | our reliance on our engineering, procurement and construction (“EPC”) contractors and other contractors for the successful completion of our energy-related infrastructure; |
• | shortages of qualified officers and crew impairing our ability to operate or increasing the cost of crewing our vessels; |
• | uncertainty related to construction costs, development timelines, third-party subcontractors and equipment manufacturers required to perform our development services; |
• | our ability to obtain and maintain approvals and permits from governmental and regulatory agencies with respect to the design, construction and operation of our facilities and provision of our services; |
• | our ability to maintain relationships with our customers and existing suppliers, source new suppliers for LNG and critical components of our projects and complete building out our supply chain; |
• | our ability to connect with third-party pipelines, power plants and other facilities that provide gas receipt and delivery downstream of our integrated terminals; |
• | our ability to purchase or receive physical delivery of LNG in sufficient quantities to satisfy our delivery obligations under GSAs or at attractive prices; |
• | changes in the demand for and price of LNG and natural gas and LNG regasification capacity; |
• | the competitive market for LNG regasification services; |
• | fluctuations in hire rates for FSRUs; |
• | infrastructure constraints and community and political group resistance to existing and new LNG and natural gas infrastructure over concerns about the environment, safety and terrorism; |
• | outbreaks of epidemic and pandemic diseases and governmental responses thereto; |
• | our ability to access financing sources on favorable terms; |
• | our debt level and finance lease liabilities, which may limit our flexibility in obtaining additional financing, refinancing credit facilities upon maturity; |
• | volatility of the global financial markets and uncertain economic conditions; |
• | our financing agreements, which include financial restrictions and covenants and are secured by certain of our vessels; |
• | compliance with various international treaties and conventions and national and local environmental, health, safety and maritime conduct laws that affect our operations; |
• | our dependence upon distributions from our subsidiaries to pay dividends, if any, taxes and other expenses and make payments under the Tax Receivable Agreement; |
• | the requirement that we pay over to the TRA Beneficiaries (as defined below) most of the tax benefits we receive; |
• | payments under the Tax Receivable Agreement being accelerated and/or significantly exceeding the tax benefits, if any, that we actually realize; |
• | the possibility that EELP will be required to make distributions to us and the other partners of EELP; |
• | the material weaknesses identified in our internal control over financial reporting; |
• | Kaiser having the ability to direct the voting of a majority of the voting power of our common stock, and his interests may conflict with those of our other stockholders; and |
• | our ability to pay dividends on our Class A common stock. |
(1) | At the closing of this offering, EE Holdings will own 81,497,778 Class B interests of EELP and 81,497,778 shares of Class B common stock of Excelerate. |
(2) | Each share of Class A common stock of Excelerate will be entitled to one vote and will vote together with the Class B common stock as a single class, except as provided in our amended and restated certificate of incorporation or required by law. See “Description of Capital Stock—Common Stock—Class A Common Stock.” |
(3) | Each share of Class B common stock is entitled to one vote and will vote together with the Class A common stock as a single class, except as provided in our amended and restated certificate of incorporation or required by law. The Class B common stock will have no economic rights in Excelerate. See “Description of Capital Stock—Common Stock—Class B Common Stock.” |
(4) | Excelerate will, directly or indirectly, own all of the Class A interests of EELP after the Reorganization, which upon the completion of this offering will represent the right to receive approximately 23.0% of the distributions made by EELP. While this interest represents a minority of economic interests in EELP, it represents 100% of the voting interests, and Excelerate (or its subsidiary) will be admitted as the general partner of EELP in connection with the Reorganization. As a result, Excelerate will operate and control all of EELP’s business and affairs and will be required to consolidate its financial results into Excelerate’s financial statements. |
(5) | At the closing of the offering, EE Holdings will own all of the outstanding shares of Class B common stock and all of the outstanding Class B interests of EELP, which upon the completion of this offering will represent the right to receive approximately 77.0% of the distributions made by EELP. No person will have any voting rights in EELP on account of the Class B interests, except for the right to approve amendments to the EELP Limited Partnership Agreement (as defined herein) that adversely affect the rights of holders of Class B interests. However, through ownership of shares of Class B common stock, EE Holdings will control a majority of the voting power of the common stock of Excelerate, the general partner (or sole owner of the general partner) of EELP and will therefore have indirect control over EELP. Class B interests of EELP may be exchanged for shares of our Class A common stock or, at our election, for cash, subject to certain restrictions pursuant to the EELP Limited Partnership Agreement described in “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate Energy, Inc.—EELP Limited Partnership Agreement.” When a Class B interest is exchanged for a share of our Class A common stock or, at our election, for cash, it will result in the automatic cancellation of the corresponding number of shares of our Class B common stock and, therefore, will decrease the aggregate voting power of EE Holdings. Any beneficial holder exchanging Class B interests must ensure that the applicable corresponding number of shares of Class B common stock are delivered to us for cancellation as a condition of exercising its right to exchange Class B interests for shares of our Class A common stock or, at our election, for cash. After a Class B interest is surrendered for exchange, it will not be available for reissuance. |
• | 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; |
• | 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 of 2002, or the Sarbanes-Oxley Act, for up to five years or until we no longer qualify as an emerging growth company; |
• | not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; |
• | 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 |
• | 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. |
• | approximately $281.0 million of the net proceeds of this offering to fund our growth strategy, including our projects in Brazil at the Bahia Regasification Terminal, Albania at the Vlora LNG Terminal, the Philippines at the Filipinas LNG Gateway, and Bangladesh at the Payra LNG Terminal; |
• | approximately $50.0 million of the net proceeds of this offering to fund in part EELP's purchase of the Foundation Vessels in connection with the Reorganization; and |
• | approximately $9.2 million of the net proceeds of this offering to pay the expenses incurred by us in connection with this offering and the Reorganization. |
• | 2,400,000 shares of Class A common stock issuable upon exercise of the underwriters’ option to purchase additional shares; |
• | 10,750,000 shares of Class A common stock issuable under our Excelerate Energy, Inc. Long-Term Incentive Plan (the “LTI Plan”), including: |
(i) | shares underlying equity awards with an aggregate grant date fair value of approximately $5.0 million that we intend to grant to certain independent directors and employees, including members of our management team, pursuant to the LTI Plan in connection with this offering, which, at the midpoint of the price range set forth on the cover page of this prospectus, would be comprised of approximately 22,224 shares of Class A common stock underlying restricted stock units and approximately 373,821 stock options, which restricted stock units will vest ratably over a three-year period and which stock options will have an exercise price per share equal to the public offering price in this offering; and |
(ii) | 10,353,955 additional shares of Class A common stock to be reserved for future issuance of awards under the LTI Plan; and |
• | 81,497,778 shares of Class A common stock reserved for issuance upon exchange of the Class B interests of EELP (and the cancellation of the corresponding shares of Class B common stock) that will be outstanding immediately after this offering. |
| | Year Ended December 31, | ||||
(In thousands) | | | 2021 | | | 2020 |
Statements of Operations Data: | | | | | ||
Revenues | | | | | ||
FSRU and terminal services | | | $468,030 | | | $430,843 |
Gas sales | | | 420,525 | | | — |
Total revenues | | | 888,555 | | | 430,843 |
Operating expenses | | | | | ||
Cost of revenue and vessel operating expenses | | | 192,723 | | | 150,478 |
Direct cost of gas sales | | | 390,518 | | | — |
Depreciation and amortization | | | 104,908 | | | 104,167 |
Selling, general and administrative | | | 47,088 | | | 42,942 |
Restructuring, transition and transaction expenses | | | 13,974 | | | — |
Total operating expenses | | | 749,211 | | | 297,587 |
Operating income | | | 139,344 | | | 133,256 |
Other income (expense) | | | | | ||
Interest expense | | | (31,892) | | | (37,460) |
Interest expense – related party | | | (48,922) | | | (51,970) |
Earnings from equity-method investment | | | 3,263 | | | 3,094 |
Other income, net | | | 564 | | | (92) |
Income before income taxes | | | 62,357 | | | 46,828 |
Provision for income taxes | | | (21,168) | | | (13,937) |
Net income | | | 41,189 | | | 32,891 |
Less net income attributable to non-controlling interests | | | 3,035 | | | 2,622 |
Less net income attributable to non-controlling interests – ENE Onshore | | | (2,964) | | | (8,484) |
Net income attributable to EELP | | | $41,118 | | | $38,753 |
Additional financial data: | | | | | ||
Gross Margin | | | $200,406 | | | $176,198 |
Adjusted Gross Margin | | | 305,314 | | | 280,365 |
Adjusted EBITDA | | | 262,053 | | | 240,425 |
Adjusted EBITDAR | | | 291,051 | | | 256,197 |
Capital expenditures | | | 36,091 | | | 41,258 |
| | As of December 31, | ||||
(In thousands) | | | 2021 | | | 2020 |
Balance Sheets Data: | | | | | ||
Property and equipment, net | | | $1,433,169 | | | $1,501,528 |
Total assets | | | 2,500,736 | | | 2,255,724 |
Long-term debt (includes current portion) | | | 233,415 | | | 262,424 |
Long-term debt (includes current portion) – related party | | | 198,313 | | | 427,193 |
Total liabilities | | | 1,496,810 | | | 1,484,563 |
| | Year Ended December 31, | ||||
(In thousands) | | | 2021 | | | 2020 |
Statements of Cash Flow Data: | | | | | ||
Net cash provided by (used in): | | | | | ||
Operating activities | | | $141,613 | | | $108,964 |
Investing activities | | | (36,091) | | | (41,258) |
Financing activities | | | $(124,097) | | | $(31,438) |
| | Year Ended December 31, | ||||
(In thousands) | | | 2021 | | | 2020 |
FSRU and terminal services revenues | | | $468,030 | | | $430,843 |
Gas sales revenues | | | 420,525 | | | — |
Cost of revenue and vessel operating expenses | | | 192,723 | | | 150,478 |
Direct cost of gas sales | | | 390,518 | | | — |
Depreciation and amortization expense | | | 104,908 | | | 104,167 |
Gross Margin | | | 200,406 | | | 176,198 |
Depreciation and amortization expense | | | 104,908 | | | 104,167 |
Adjusted Gross Margin | | | $305,314 | | | $280,365 |
| | Year Ended December 31, | ||||
(In thousands) | | | 2021 | | | 2020 |
Net income | | | $41,189 | | | $32,891 |
Interest expense | | | 80,814 | | | 89,430 |
Provision for income taxes | | | 21,168 | | | 13,937 |
Depreciation and amortization expense | | | 104,908 | | | 104,167 |
Restructuring, transition and transaction expenses | | | 13,974 | | | — |
Adjusted EBITDA | | | 262,053 | | | 240,425 |
Vessel and infrastructure rent expense | | | 28,998 | | | 15,772 |
Adjusted EBITDAR | | | $291,051 | | | $256,197 |
• | at the end of a specified time period following certain events of force majeure or the outbreak of war; |
• | extended unexcused service interruptions or deficiencies; |
• | loss of or requisition of the FSRU; |
• | the occurrence of an insolvency event; and |
• | the occurrence of certain uncured, material breaches. |
• | marine disasters; |
• | piracy; |
• | environmental incidents; |
• | bad weather; |
• | mechanical failures; |
• | grounding, fire, explosions and collisions; |
• | human error; and |
• | war and terrorism. |
• | death or injury to persons, loss of property or damage to the environment, natural resources or protected species, and associated costs; |
• | delays in taking delivery of an LNG cargo or discharging regasified LNG, as applicable; |
• | suspension or termination of customer contracts, and resulting loss of revenues; |
• | governmental fines, penalties or restrictions on conducting business; |
• | higher insurance rates; and |
• | damage to our reputation and customer relationships generally. |
• | the cost of labor and materials; |
• | customer requirements; |
• | fleet and project size; |
• | the cost of replacement vessels; |
• | length of charters; |
• | governmental regulations and maritime self-regulatory organization standards relating to safety, security or the environment; |
• | competitive standards; and |
• | operating conditions, including adverse weather events, sea currents and natural disasters impacting performance, required maintenance and repair intervals and spending. |
• | design and engineer each of our facilities to operate in accordance with specifications; |
• | engage and retain third-party subcontractors and procure equipment and supplies; |
• | respond to difficulties such as equipment failure, delivery delays, schedule changes and failures to perform by subcontractors, some of which are beyond their control; |
• | attract, develop and retain skilled personnel, including engineers; |
• | post required construction bonds and comply with the terms thereof; |
• | manage the construction process generally, including coordinating with other contractors and regulatory agencies; and |
• | maintain their own financial condition, including adequate working capital. |
• | additions to competitive regasification capacity; |
• | insufficient or oversupply of natural gas liquefaction or export capacity worldwide; |
• | insufficient LNG tanker capacity; |
• | weather conditions and natural disasters; |
• | reduced demand and lower prices for natural gas over an extended period; |
• | higher LNG prices, which could make other fuels more competitive in the markets where we operate; |
• | increased natural gas production deliverable by pipelines in the markets where we operate, which could suppress demand for LNG; |
• | decreased oil and natural gas exploration activities, including shut-ins and possible proration, which have begun and may continue to decrease the production of natural gas available for liquefaction; |
• | cost improvements that allow competitors to offer LNG regasification services at reduced prices; |
• | changes in supplies of, and prices for, alternative energy sources, such as coal, oil, nuclear, hydroelectric, wind and solar energy, which may reduce the demand for natural gas; |
• | changes in regulatory, tax or other governmental policies regarding imported or exported LNG, natural gas or alternative energy sources, which may reduce the demand for imported LNG or natural gas in the markets where we operate; |
• | political conditions; |
• | adverse relative demand for LNG compared to other markets; |
• | changes in economic conditions of countries where we operate or purchase or sell LNG and natural gas; and |
• | cyclical trends in general business and economic conditions that cause changes in the demand for natural gas. |
• | FSRU experience and quality of ship operations; |
• | shipping industry relationships and reputation for customer service and safety; |
• | technical ability and reputation for operation of highly specialized vessels, including FSRUs; |
• | quality and experience of seafaring crew; |
• | financial stability; |
• | construction management experience, including (i) relationships with shipyards and the ability to secure suitable berths and (ii) the ability to obtain on-time delivery of new FSRUs according to customer specifications; |
• | willingness to accept operational and other risks, such as allowing customer termination rights for extended operational failures and force majeure events; |
• | the ability to commence operations quickly; and |
• | price competitiveness. |
• | limited downstream infrastructure limiting the development of new or expanded import terminals; |
• | local community resistance to proposed or existing LNG facilities based on safety, environmental or security concerns; |
• | any significant explosion, spill or similar incident involving an LNG facility or vessel involved in the LNG transportation, storage and regasification industry, including an FSRU or LNGC; and |
• | labor or political unrest affecting existing or proposed sites for LNG regasification terminals. |
• | inability to achieve our target costs or our target pricing for long-term contracts; |
• | failure to develop cost-effective logistics solutions; |
• | failure to manage expanding operations in the projected time frame; |
• | failure to win new bids or contracts on the terms, size and within the time frame we need to execute our business strategy; |
• | inability to attract and retain personnel in a timely and cost-effective manner; |
• | failure of investments in technology and machinery, such as regasification technology, to perform as expected; |
• | increases in competition which could increase our costs and undermine our profits; |
• | inability to source LNG in sufficient quantities and/or at economically attractive prices; |
• | failure to anticipate and adapt to new trends in the energy sector of the countries where we operate; |
• | increases in operating costs, including the need for repairs and maintenance, capital improvements, insurance premiums, general taxes, real estate taxes and utilities or other costs that affect our profit margins; |
• | inability to raise significant additional debt and equity capital in the future to implement our strategy as well as to operate and expand our business; |
• | general economic, political and business conditions in the United States, Argentina, Bangladesh, Brazil, Israel, Pakistan, the UAE and in the other geographic areas in which we operate or intend to operate; |
• | inflation, depreciation of the currencies of the countries in which we operate and fluctuations in interest rates; |
• | failure to obtain approvals from governmental regulators and relevant local authorities for the construction and operation of potential future projects and other relevant approvals; |
• | existing and future governmental laws and regulations; |
• | inability, or failure, of any customer or contract counterparty to perform their contractual obligations to us; or |
• | uncertainty regarding the timing, pace and extent of an economic recovery in the United States, the other jurisdictions in which we operate and elsewhere, which in turn will likely affect demand for crude oil and natural gas. |
• | crew changes have been canceled or delayed due to port authorities denying or delaying disembarkation, a high potential of infection in countries where crew changes may otherwise have taken place, and the inability to repatriate crew members due to lack of international air transport or denial of re-entry by crew members’ home countries that have closed their borders; |
• | the inability to complete scheduled engine overhauls, routine maintenance work and management of equipment malfunctions; |
• | shortages or a lack of access to required spare parts for our vessels, and delays in repairs to, or scheduled or unscheduled maintenance or modifications or dry docking of, our vessels, as a result of a lack of berths available at shipyards from a shortage in labor at shipyards or contractors or due to other business disruptions; |
• | necessity to find new, remote means to complete vessel inspections and related certifications by class societies, customers or government agencies; and |
• | disruptions to our business from, or additional costs related to, new regulations, directives or practices implemented in response to the pandemic, such as travel restrictions, increased inspection regimes, hygiene measures (such as quarantining and physical distancing) or increased implementation of remote working arrangements. |
• | managing crew rotations depending on the duration and severity of Covid-19 in countries from which our crews are sourced as well as any restrictions in place at ports in which our vessels call; |
• | providing financial support to Excelerate Technical Management (“ETM”) employees while on shore leave; |
• | under maritime standards and the Maritime Labour Convention, on a case-by-case basis, providing financial assistance to seafarers on shore as necessary; |
• | arranging to accept delivery of additional spare parts and critical supplies where possible in our supply chains; |
• | postponing or cancelling planned engine overhaul and routine maintenance services where possible, and arranging for remote servicing of equipment when possible; |
• | cancelling non-critical boardings, limiting visits to vettings inspectors, pilots, critical service engineers and port officials where allowed and implementing procedures and mitigation controls on board to limit the risk of human-to-human transmission from visiting personnel; |
• | more extensively using remote ship visits by our management and support functions; |
• | monitoring applicable local legislation and social distancing guidelines related to minimizing human-to-human transmission, IT systems and network capacity and financial reporting systems and internal controls over financial reporting; |
• | providing mental health support for our seafarers and global workforce through membership in organizations providing hotline support and introducing a forum for virtual sharing and collaboration on mental health concerns; and |
• | permitting flexible working arrangements for our people, encouraging full vaccination status of all employees/seafarers and postponing non-critical projects. |
• | prevailing economic conditions in the LNG, natural gas and energy markets; |
• | a substantial or extended decline or increase in demand for LNG; |
• | increases in the supply of vessel capacity; |
• | the size and age of a vessel; |
• | the remaining term on existing time charters; and |
• | the cost of retrofitting or modifying existing vessels, as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, customer requirements or otherwise. |
• | general market conditions; |
• | the duration and effects of the Covid-19 pandemic; |
• | the market’s perception of our growth potential; |
• | our current debt levels; |
• | our current and expected future earnings; |
• | restrictions in our customer contracts to pledge or place debt on our assets; |
• | risk allocation requirements for limited recourse financing vehicles; |
• | creditworthiness of potential customers; |
• | our cash flow; and |
• | the market price per share of our Class A common stock. |
• | our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be limited, or such financing may not be available on favorable terms; |
• | we will need a substantial portion of our cash flows to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations and future business opportunities; |
• | our debt level may make us vulnerable to competitive pressures or a downturn in our business or the economy generally; and |
• | our debt level may limit our flexibility in responding to changing business and economic conditions. |
• | merge into, or consolidate with, any other entity or sell, or otherwise dispose of, all or substantially all of our assets; |
• | make or pay dividends; |
• | incur additional indebtedness; |
• | incur or make any capital expenditures; or |
• | materially amend or terminate our customer contract for the vessel that secures the financing. |
• | the likelihood that an active trading market for shares of our Class A common stock will develop or be sustained; |
• | the liquidity of any such market; |
• | the ability of our stockholders to sell their shares of Class A common stock; or |
• | the price that our stockholders may obtain for their Class A common stock. |
• | institute a more comprehensive compliance function, including for financial reporting and disclosures; |
• | continue to prepare and distribute periodic public reports in compliance with our obligations under federal securities laws; |
• | comply with rules promulgated by the NYSE; |
• | continue to prepare and distribute periodic public reports in compliance with our obligations under federal securities laws; |
• | enhance our investor relations function; |
• | establish new internal policies, such as those relating to insider trading; and |
• | involve and retain to a greater degree outside counsel and accountants in the above activities. |
• | we did not design and maintain effective controls over period end financial reporting processes and procedures, controls over significant accounts and disclosures to achieve complete, accurate and timely |
• | we did not design and maintain effective controls over the proper timing of revenue recognition for dry-dock revenue contracts; |
• | we did not design and maintain effective controls to analyze compliance with non-financial debt covenants and conditions; and |
• | we did not design and maintain effective controls to verify the completeness and accuracy of our income tax provision. |
• | our operating and financial performance; |
• | quarterly variations in the rate of growth of our financial indicators, such as net income per share, net income and revenues; |
• | the public reaction to our press releases, our other public announcements and our filings with the SEC; |
• | strategic actions by our competitors; |
• | changes in revenue or earnings estimates, or changes in recommendations or withdrawals of research coverage, by equity research analysts; |
• | market and industry perception of our success, or lack thereof, in pursuing our growth strategies; |
• | introductions or announcements of new products offered by us or significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors and the timing of such introductions or announcements; |
• | our ability to effectively manage our growth; |
• | the impact of pandemics on us and the national and global economies; |
• | speculation in the press or investment community; |
• | the failure of research analysts to cover our Class A common stock; |
• | whether investors or securities analysts view our stock structure unfavorably, particularly the significant voting control of our executive officers, directors and their affiliates; |
• | our ability or inability to raise additional capital through the issuance of equity or debt or other arrangements and the terms on which we raise it; |
• | additional shares of our Class A common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales, including if existing stockholders sell shares into the market when applicable “lock-up” periods end; |
• | changes in accounting principles, policies, guidance, interpretations or standards; |
• | additions or departures of key management personnel; |
• | actions by our stockholders; |
• | changes in operating performance and stock market valuations of companies in our industry, including our vendors and competitors; |
• | trading volume of our Class A common stock; |
• | price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole and those resulting from natural disasters, severe weather events, terrorist attacks and responses to such events; |
• | lawsuits threatened or filed against us; |
• | domestic and international economic, legal and regulatory factors unrelated to our performance; |
• | privacy or cybersecurity breaches, data theft or other security incidents or failure to comply with applicable data privacy laws, rules and regulations; |
• | our ability to obtain, maintain, protect, defend and enforce our intellectual property; and |
• | the realization of any risks described under this “Risk Factors” section. |
• | providing for two classes of stock; |
• | authorizing the issuance of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt; |
• | from and after such time as EE Holdings (including its permitted transferees) ceases to beneficially own at least 40% of the combined voting power of our then-outstanding capital stock entitled to vote generally in director elections (the “Trigger Date”), establishing a classified board of directors, with each class serving three-year staggered terms, so that not all members of our board of directors are elected at one time; |
• | from and after such time as our board is classified, providing that directors can be removed only for cause and only by the affirmative vote of at least 662∕3% of the voting power of the stock outstanding and entitled to vote on the election of directors, voting together as a single class; |
• | prohibiting the use of cumulative voting for the election of directors; |
• | from and after the Trigger Date, eliminating the ability of stockholders to call special meetings and prohibiting stockholder action by written consent and instead requiring stockholder actions to be taken at a meeting of our stockholders; |
• | from and after the Trigger Date, providing that only the board can fill vacancies on the board of directors; |
• | from and after the Trigger Date, requiring the approval of the holders of at least 662∕3% of voting power of the stock outstanding and entitled to vote thereon, voting together as a single class, to amend or repeal our bylaws and certain provisions of our certificate of incorporation; |
• | establishing advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders; and |
• | providing that the board of directors is expressly authorized to adopt, or to alter or repeal, our bylaws. |
• | a majority of such company’s board of directors consist of independent directors; |
• | such company have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing such committee’s purpose and responsibilities; |
• | such company have a compensation committee that is composed entirely of independent directors with a written charter addressing such committee’s purpose and responsibilities; and |
• | such company conduct an annual performance evaluation of the nominating and governance and compensation committees. |
• | prevailing economic and market conditions in the natural gas and energy markets; |
• | negative global or regional economic or political conditions, particularly in LNG-consuming regions, which could reduce energy consumption or its growth; |
• | declines in demand for LNG or the services of LNGCs or FSRUs or; |
• | increases in the supply of LNGC capacity operating in the spot market or the supply of FSRUs; |
• | marine disasters; war, piracy or terrorism; environmental accidents; or inclement weather conditions; |
• | mechanical failures or accidents involving any of our vessels; and |
• | drydock scheduling and capital expenditures. |
• | our ability to enter into contracts with customers and our customers’ failure to perform their contractual obligations; |
• | customer termination rights in our contracts; |
• | the risks inherent in operating our FSRUs and other LNG infrastructure assets; |
• | the technical complexity of our FSRUs and LNG import terminals and related operational problems; |
• | cancellations, time delays, unforeseen expenses and other complications while developing our projects; |
• | our inability to develop a project successfully and our customers’ failure to fulfill their payment obligations to us following our capital investment in a project; |
• | the failure of our regasification terminals and other facilities to operate as expected or be completed; |
• | our need for substantial expenditures to maintain and replace, over the long-term, the operating capacity of our fleet, regasification terminals and associated assets, pipelines and downstream infrastructure; |
• | our reliance on our EPC contractors and other contractors for the successful completion of our energy-related infrastructure; |
• | shortages of qualified officers and crew impairing our ability to operate or increasing the cost of crewing our vessels; |
• | uncertainty related to construction costs, development timelines, third-party subcontractors and equipment manufacturers required to perform our development services; |
• | our ability to obtain and maintain approvals and permits from governmental and regulatory agencies with respect to the design, construction and operation of our facilities and provision of our services; |
• | our ability to maintain relationships with our customers and existing suppliers, source new suppliers for LNG and critical components of our projects and complete building out our supply chain; |
• | our ability to connect with third-party pipelines, power plants and other facilities that provide gas receipt and delivery downstream of our integrated terminals; |
• | our ability to purchase or receive physical delivery of LNG in sufficient quantities to satisfy our delivery obligations under GSAs or at attractive prices; |
• | changes in the demand for and price of LNG and natural gas and LNG regasification capacity; |
• | the competitive market for LNG regasification services; |
• | fluctuations in hire rates for FSRUs; |
• | infrastructure constraints and community and political group resistance to existing and new LNG and natural gas infrastructure over concerns about the environment, safety and terrorism; |
• | outbreaks of epidemic and pandemic diseases and governmental responses thereto; |
• | our ability to access financing sources on favorable terms; |
• | our debt level and finance lease liabilities, which may limit our flexibility in obtaining additional financing, refinancing credit facilities upon maturity; |
• | the effects of international conflicts, including sanctions, retaliatory measures and changes in the availability and prices of LNG, natural gas and oil resulting from the invasion of Ukraine by Russia, on our business, customers, industry and outlook; |
• | volatility of the global financial markets and uncertain economic conditions, including as a result of the invasion of Ukraine by Russia; |
• | our financing agreements, which include financial restrictions and covenants and are secured by certain of our vessels; |
• | compliance with various international treaties and conventions and national and local environmental, health, safety and maritime conduct laws that affect our operations; |
• | our dependence upon distributions from our subsidiaries to pay dividends, if any, taxes and other expenses and make payments under the Tax Receivable Agreement; |
• | the requirement that we pay over to the TRA Beneficiaries most of the tax benefits we receive; |
• | payments under the Tax Receivable Agreement being accelerated and/or significantly exceeding the tax benefits, if any, that we actually realize; |
• | the possibility that EELP will be required to make distributions to us and the other partners of EELP; |
• | the material weaknesses identified in our internal control over financial reporting; |
• | Kaiser having the ability to direct the voting of a majority of the voting power of our common stock, and his interests may conflict with those of our other stockholders; |
• | our ability to pay dividends on our Class A common stock; |
• | our status as an emerging growth company; |
• | the possibility that circumstances preclude any of our director nominees from joining our board of directors; |
• | other risks and uncertainties inherent in our business; and |
• | other risks, uncertainties and factors set forth in this prospectus, including those set forth under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” |
• | EE Holdings will amend and restate the limited partnership agreement of EELP (the “EELP Limited Partnership Agreement”) whereby, all of the outstanding interests of EELP will be recapitalized into Class B interests and EELP will be authorized to issue Class A interests. Subject to certain limitations, the EELP Limited Partnership Agreement will permit Class B interests to be exchanged for shares of Class A common stock on a one-for-one basis or, at Excelerate’s election, for cash. See “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate Energy, Inc.—The EELP Limited Partnership Agreement.” |
• | Excelerate will amend and restate its certificate of incorporation to, among other things, provide for Class A common stock and Class B common stock. See “Description of Capital Stock.” |
• | Excelerate will contribute shares of Class A common stock with a fair market value of $188.5 million to EELP in exchange for an equal number of Class A interests in EELP. |
• | In exchange for (i) shares of Class A common stock with a fair market value (based on the public offering price) of $188.5 million (which is equal to 8,377,778 shares of Class A common stock assuming a public offering price equal to the midpoint of the price range set forth on the cover of this prospectus), (ii) a cash payment of $50.0 million and (iii) $21.5 million of estimated future payments under the Tax Receivable Agreement, EELP will purchase from Maya Maritime LLC, a wholly owned subsidiary of the Foundation, the Foundation Vessels pursuant to a securities purchase agreement. Each $1.00 increase or decrease in the assumed initial public offering price of $22.50 per share of Class A common stock (the midpoint of the price range set forth on the cover of this prospectus) would increase or decrease the number of shares of Class A common stock exchanged for the Foundation Vessels by approximately 375,000 shares, which would increase or decrease the Foundation’s indirect ownership percentage of our common stock by approximately 0.3%. |
• | Excelerate will sell to the underwriters in this offering 16,000,000 shares of our Class A common stock (assuming no exercise of the underwriters’ option to purchase additional shares). |
• | Excelerate will issue to EE Holdings all of our outstanding shares of Class B common stock. In connection with the issuance of Class B common stock to EELP, Excelerate (or a wholly owned subsidiary of Excelerate) will be admitted as the general partner of EELP. |
• | Excelerate Energy, LLC will distribute to EE Holdings all of its interests in EELP, and EE Holdings will contribute to EELP all of its interests in Excelerate Energy, LLC, which will be dissolved at a later date. |
• | Excelerate will enter into the Tax Receivable Agreement for the benefit of the TRA Beneficiaries, pursuant to which Excelerate will pay 85% of the amount of the net cash tax savings, if any, that Excelerate is deemed to realize as a result of (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 |
• | We will enter into the Registration Rights Agreement to provide for certain rights and restrictions after the offering. See “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate Energy, Inc.—Registration Rights Agreement.” |
• | approximately $281.0 million of the net proceeds of this offering to fund our growth strategy, including our projects in Brazil at the Bahia Regasification Terminal, Albania at the Vlora LNG Terminal, the Philippines at the Filipinas LNG Gateway and Bangladesh at the Payra LNG Terminal; |
• | approximately $50.0 million of the net proceeds of this offering to fund in part EELP's purchase of the Foundation Vessels in connection with the Reorganization; |
• | approximately $9.2 million to pay the expenses incurred by us in connection with this offering and the Reorganization; and |
• | other than as set forth below, the remainder for working capital and other general corporate purposes. |
| | As of December 31, 2021 | ||||
(in thousands, except per share amounts and interest data) | | | Historical EELP | | | Pro Forma Excelerate |
Cash and cash equivalents(1): | | | $72,786 | | | $357,511 |
Debt and finance leases: | | | | | ||
Debt facilities | | | 233,415 | | | 233,415 |
Debt facilities – related party | | | 198,313 | | | 198,313 |
Finance lease liabilities | | | 251,658 | | | 251,658 |
Finance lease liabilities – related party | | | 226,619 | | | — |
New credit facility | | | — | | | — |
Total debt and finance leases: | | | $910,005 | | | $683,386 |
Partners’ / stockholders’ equity: | | | | | ||
Equity interest | | | 1,135,769 | | | — |
Related party note receivable | | | (6,759) | | | (6,759) |
Accumulated other comprehensive loss | | | (9,178) | | | (9,178) |
Retained Earnings | | | — | | | (18,965) |
Non-controlling interest | | | 14,376 | | | 1,150,064 |
Non-controlling interest – ENE Onshore | | | (130,282) | | | (130,282) |
Class A common stock (no shares authorized, issued and outstanding, actual; 300,000,000 shares authorized, 24,377,778 shares issued and outstanding, pro forma) | | | — | | | 24 |
Class B common stock (no shares authorized, issued and outstanding, actual; 150,000,000 shares authorized, 81,497,778 shares issued and outstanding, pro forma) | | | — | | | 81 |
Additional paid-in capital | | | — | | | 500,328 |
Total consolidated partners’ / stockholders’ equity: | | | 1,003,926 | | | 1,485,313 |
Total capitalization: | | | $1,913,931 | | | $2,168,699 |
(1) | Includes approximately $3.7 million of expenses previously paid by EELP in connection with this offering through December 31, 2021. |
(in thousands) | | | |
Pro forma tangible assets | | | $2,826,992 |
Pro forma liabilities | | | 1,341,679 |
Pro forma net tangible book value after this offering | | | $1,485,313 |
Less: | | | |
Proceeds from offering net of underwriting discounts | | | 340,200 |
Offering expenses | | | (9,200) |
Pro forma net tangible book value as of December 31, 2021 | | | $1,154,313 |
Assumed initial public offering price per share | | | | | $22.50 | |
Pro forma net tangible book value per share as of December 31, 2021 | | | $10.90 | | | |
Increase in pro forma net tangible book value per share attributable to new investors | | | $3.13 | | | |
Pro forma net tangible book value per share after the offering | | | | | $14.03 | |
Dilution in pro forma net tangible book value per share to new investors | | | | | $8.47 |
| | Shares purchased(1) | | | Total consideration(2) | | | Average price per share | |||||||
| | Number | | | % | | | Number | | | % | | |||
Existing stockholders | | | 81,497,778 | | | 77% | | | —(3) | | | —% | | | $— |
New investors(4) | | | 24,377,778 | | | 23% | | | $548,500,000 | | | 100% | | | $22.50 |
Total | | | 105,875,556 | | | 100% | | | $548,500,000 | | | 100% | | | $5.18 |
(1) | If the underwriters exercise their option to purchase additional shares in full, our existing stockholders would own approximately 75.3% and our new investors would own approximately 24.7% of the total number of shares of our Class A common stock outstanding after this offering. |
(2) | If the underwriters exercise their option to purchase additional shares in full, the total consideration paid by our new investors would be approximately $602,500,000 (or 100%). |
(3) | Existing stockholder past contributions to EELP not included. |
(4) | Includes the issuance to Maya Maritime LLC of 8,377,778 shares of Class A common stock (assuming a public offering price equal to the midpoint of the price range set forth on the cover of this prospectus), which serves as a portion of the consideration for EELP's acquisition of the Foundation Vessels. |
• | the Reorganization as described in “Organizational Structure”; |
• | the acquisition of the Foundation Vessels; |
• | the intended use of proceeds from this offering as described in “Use of Proceeds”; |
• | the Tax Receivable Agreement as described in the “Organizational Structure” and “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate—Tax Receivable Agreement” sections in this prospectus; |
• | the issuance of 16,000,000 shares of our Class A common stock to the investors in this offering in exchange for net proceeds of approximately $340.2 million (based on an assumed initial public offering price of $22.50 per share, the midpoint of the price range set forth on the cover page of this prospectus), after deducting underwriting discounts and commissions but before offering expenses; |
• | the payment of fees and expenses related to this offering and the application of the net proceeds from the sale of Class A common stock in this offering to purchase Class A interests directly from EELP, at a purchase price per Class A interest equal to the initial public offering price per share of Class A common stock less the underwriting discount, with such Class A interests representing 23.0% of the outstanding interests of EELP; and |
• | the provision for corporate income taxes on the balance sheet and income statement of Excelerate that will be taxable as a corporation for U.S. federal and state income tax purposes. |
| | | | Transaction Adjustments | | | |||||||||
| | EELP Historical Consolidated | | | Vessel Acquisition Adjustments | | | Reorganization Adjustments | | | Offering Adjustments | | | Excelerate Pro Forma Condensed Consolidated | |
| | (in thousands) | |||||||||||||
Assets | | | | | | | | | | | |||||
Current assets | | | | | | | | | | | |||||
Cash and cash equivalents | | | $72,786 | | | $(50,000)(2) | | | | | $334,725(9) | | | $357,511 | |
Current portion of restricted cash | | | 2,495 | | | | | | | | | 2,495 | |||
Accounts receivable, net | | | 260,535 | | | | | | | | | 260,535 | |||
Accounts receivable, net – related-party | | | 11,140 | | | | | | | | | 11,140 | |||
Inventories | | | 105,020 | | | | | | | | | 105,020 | |||
Current portion of net investments in sales-type leases | | | 12,225 | | | | | | | | | 12,225 | |||
Other current assets | | | 26,194 | | | (1,282)(1) | | | | | (3,725)(11) | | | 21,187 | |
Total current assets | | | 490,395 | | | (51,282) | | | | | 331,000 | | | 770,113 | |
Restricted cash | | | 15,683 | | | | | | | | | 15,683 | |||
Property and equipment, net | | | 1,433,169 | | | 20,813(2) | | | | | | | 1,453,982 | ||
Operating lease right-of-use assets | | | 106,225 | | | | | | | | | 106,225 | |||
Net investments in sales-type leases | | | 412,908 | | | | | | | | | 412,908 | |||
Investment in equity method investee | | | 22,051 | | | | | | | | | 22,051 | |||
Deferred tax assets | | | — | | | 1,122(3) | | | 32,140(7)(10) | | | | | 33,262 | |
Other assets | | | 20,305 | | | (7,537)(1) | | | | | | | 12,768 | ||
Total assets | | | $2,500,736 | | | $(36,884) | | | $32,140 | | | $331,000 | | | $2,826,992 |
Liabilities and Stockholders’ Equity | | | | | | | | | | | |||||
Current liabilities | | | | | | | | | | | |||||
Accounts payable | | | $303,651 | | | $ | | | $ | | | $ | | | $303,651 |
Accounts payable to related party | | | 7,937 | | | | | | | | | 7,937 | |||
Accrued liabilities and other liabilities | | | 105,034 | | | | | | | | | 105,034 | |||
Deferred revenue | | | 9,653 | | | (1,282)(1) | | | | | | | 8,371 | ||
Current portion of long-term debt | | | 19,046 | | | | | | | | | 19,046 | |||
Current portion of long-term debt – related party | | | 7,096 | | | | | | | | | 7,096 | |||
Current portion of operating lease liabilities | | | 30,215 | | | | | | | | | 30,215 | |||
Current portion of finance lease liabilities | | | 21,903 | | | | | | | | | 21,903 | |||
Current portion of finance lease liabilities – related party | | | 15,627 | | | (15,627)(4) | | | | | | | — | ||
Total current liabilities | | | 520,162 | | | (16,909) | | | | | | | 503,253 | ||
Derivative liabilities | | | 2,999 | | | | | | | | | 2,999 | |||
Long-term debt, net | | | 214,369 | | | | | | | | | 214,369 | |||
Long-term debt, net – related party | | | 191,217 | | | | | | | | | 191,217 | |||
Operating lease liabilities | | | 77,936 | | | | | | | | | 77,936 | |||
Finance lease liabilities | | | 229,755 | | | | | | | | | 229,755 | |||
Finance lease liabilities – related party | | | 210,992 | | | (210,992)(4) | | | | | | | — | ||
TRA liability | | | — | | | 21,482(3) | | | 51,288(7)(10) | | | | | 72,770 | |
Asset retirement obligations | | | 34,929 | | | | | | | | | 34,929 | |||
Other long-term liabilities | | | 14,451 | | | | | | | | | 14,451 | |||
Total liabilities | | | 1,496,810 | | | (206,419) | | | 51,288 | | | | | 1,341,679 | |
Partners’ / stockholders’ equity | | | | | | | | | | | |||||
Class A common stock, $0.001 par value | | | — | | | 8(5) | | | | | 16(9) | | | 24 | |
Class B common stock, $0.001 par value | | | — | | | | | 81(7)(8) | | | | | 81 | ||
| | | | | | | | | | ||||||
Additional paid in capital | | | — | | | 188,492(3)(5)(6) | | | (19,148)(6)(7) | | | 330,984(6)(9)(11) | | | 500,328 |
Equity interest | | | 1,135,769 | | | | | (1,135,769)(8) | | | | | — | ||
Related party note receivable | | | (6,759) | | | | | | | | | (6,759) | |||
Accumulated other comprehensive loss | | | (9,178) | | | | | | | | | (9,178) | |||
Retained Earnings | | | | | (18,965)(2) | | | | | | | (18,965) | |||
Non-controlling interest | | | 14,376 | | | | | 1,135,688(8) | | | | | 1,150,064 | ||
| | | | | | | | | | ||||||
Non-controlling interest – ENE Onshore | | | (130,282) | | | | | | | | | (130,282) | |||
Total equity | | | 1,003,926 | | | 169,535 | | | (19,148) | | | 331,000 | | | 1,485,313 |
Total liabilities and equity | | | $2,500,736 | | | $(36,884) | | | $32,140 | | | $331,000 | | | $2,826,992 |
| | | | Transaction Adjustments | | | |||||||||
| | EELP Historical Consolidated | | | Vessel Acquisition Adjustments | | | Reorganization Adjustments | | | Offering Adjustments | | | Excelerate Pro Forma Condensed Consolidated | |
| | (in thousands) | |||||||||||||
Revenues | | | | | | | | | | | |||||
FSRU and terminal services | | | $468,030 | | | $ | | | $ | | | $ | | | $468,030 |
Gas Sales | | | 420,525 | | | | | | | | | 420,525 | |||
Total revenues | | | 888,555 | | | | | | | | | 888,555 | |||
Operating expenses | | | | | | | | | | | |||||
Cost of revenue and vessel operating expense | | | 192,723 | | | 3,954(1) | | | | | | | 196,677 | ||
Direct cost of gas sales | | | 390,518 | | | | | | | | | 390,518 | |||
Depreciation and amortization | | | 104,908 | | | 994(2) | | | | | | | 105,902 | ||
Selling, general, and administrative expenses | | | 47,088 | | | | | | | | | 47,088 | |||
Restructuring, transition and transaction expenses | | | 13,974 | | | | | | | | | 13,974 | |||
Total operating expenses | | | 749,211 | | | 4,948 | | | | | | | 754,159 | ||
Operating income | | | 139,344 | | | (4,948) | | | | | | | 134,396 | ||
Other income (expense) | | | | | | | | | | | |||||
Interest expense, net | | | (31,892) | | | | | | | | | (31,892) | |||
Interest expense – related party | | | (48,922) | | | 29,080(3) | | | | | | | (19,842) | ||
Earnings from equity-method investment | | | 3,263 | | | | | | | | | 3,263 | |||
Early extinguishment of lease liability on vessel acquisition | | | — | | | (18,965)(6) | | | | | | | (18,965) | ||
Other income, net | | | 564 | | | | | | | | | 564 | |||
Income before income taxes | | | 62,357 | | | 5,167 | | | | | | | 67,524 | ||
Provision for income taxes | | | (21,168) | | | (1,242)(4) | | | 3,929(4) | | | | | (18,481) | |
Net income | | | 41,189 | | | 3,925 | | | 3,929 | | | | | 49,043 | |
Less net income attributable to non-controlling interest | | | 3,035 | | | 3,977(5) | | | 37,606(5) | | | | | 44,618 | |
Less net income attributable to non-controlling interest – ENE Onshore | | | (2,964) | | | | | | | | | (2,964) | |||
Net income attributable to partners | | | $41,118 | | | $(52) | | | $(33,677) | | | $ | | | $7,389 |
Pro forma earnings per share (basic and diluted) | | | | | | | | | | | $0.30(7) | ||||
Pro forma weighted-average shares outstanding (basic and diluted) | | | | | | | | | | | 24,377,778(7) |
(1) | This reflects the netting down of deferred revenue with lease prepayments along with the removal of prepaid drydocking costs between the Foundation and EELP as it relates to the Foundation Vessels. Upon acquisition of these vessels, any remaining deferred revenue will be netted against lease prepayments and prepaid drydocking costs (net of tax) will be removed and included in the loss on acquisition on the Foundation Vessels since these prepaid drydocking costs were considered in the purchase price paid to the Foundation. On a pro forma basis as of December 31, 2021, this loss is expected to be $19.0 million and be recognized on our income statement upon the completion of this offering. |
(2) | Reflects the net impact to property and equipment, net for the acquisition of the Excelsior vessel. This includes the removal of the historical right-of-use asset and related accumulated amortization and recognizes the new basis of $84.6 million as an owned vessel. The new basis for the owned asset represents historical basis of the asset plus the difference between the preliminary fair value of all consideration transferred for acquisition less the lease liability relieved. The pro forma adjustments included in this unaudited pro forma condensed consolidated financial information are subject to modification as additional information becomes available and as additional analyses are performed depending on changes in the final fair value determination of the assets acquired and liabilities assumed as part of the Vessel Acquisition. The final allocation of the total consideration transferred will be determined as of the Vessel Acquisition date. The total consideration includes approximately $25.0 million of cash, $78.6 million of Class A Common Stock (based on an assumed initial public offering price of $22.50 per share, the midpoint of the price range set forth on the cover page of this prospectus), and $21.5 million of contingent consideration related to the Tax Receivable Agreement. |
(3) | As described in greater detail under “Organizational Structure” and “Certain Relationships and Related Person Transactions—Proposed Transactions with Excelerate—Tax Receivable Agreement,” in connection with the |
(4) | In relation to the acquisition of the Foundation Vessels, which are expected to be completed in connection with this offering, these adjustments reflect the removal of the related current and non-current finance lease liabilities as reported in the historical consolidated financial statements of EELP. |
(5) | Reflects the issuance of $188.5 million of Class A Common Stock, which serves as a portion of the consideration for the acquisition of the Foundation Vessels. This consideration represents $109.9 million for the acquisition of Excellence, and $78.6 million for the acquisition of Excelsior. |
(6) | The computation of pro forma additional paid-in capital is set forth below: |
($ in thousands) | | | Vessel Acquisition Adjustments | | | Reorganization Adjustments | | | Offering Adjustments |
Proceeds from offering net of underwriting discounts and offering expenses | | | $ | | | $ | | | $334,709 |
Transaction costs incurred prior to this offering deferred as prepaid expenses and other current assets | | | | | | | (3,725) | ||
Purchase of Foundation Vessels | | | 188,492 | | | | | ||
Deferred tax impact of becoming a taxable Corporation | | | | | 32,140 | | | ||
Tax Receivable Agreement | | | | | (51,288) | | | ||
Additional paid-in capital | | | $188,492 | | | $(19,148) | | | $330,984 |
(7) | The Tax Receivable Agreement will provide for the payment by Excelerate to EE Holdings of 85% of the amount of the net cash tax savings, if any, that Excelerate realizes, or under certain circumstances is deemed to realize, 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 that exist as of the time of this offering 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 Excelerate entering into the Tax Receivable Agreement, including tax benefits attributable to payments that Excelerate makes under the Tax Receivable Agreement. |
(8) | Upon completion of the Transactions, we will become (or wholly own) the general partner of EELP. Although initially we will have a minority economic interest in EELP, we will have the majority voting interest in, and control of the management of, EELP. As a result, we will consolidate the financial results of EELP and will report non-controlling interests related to the interests in EELP held by the other partners of EELP on our consolidated balance sheet. Immediately following the Transactions, the economic interests held by the non-controlling interests will be approximately 77.0%. If the underwriters were to exercise their option to purchase additional shares of our Class A common stock in full, the economic interests held by the non-controlling interests would be approximately 75.3%. Through its ownership of shares of Class B common stock, EE Holdings will control a majority of the voting power of the common stock of Excelerate, the general partner of EELP (or the sole owner of the general partner of EELP), and will therefore have indirect control over EELP. |
(9) | Reflects the net effect on cash of the receipt of offering proceeds to us of $334.7 million, based on the sale of shares of Class A common stock at an assumed initial public offering price of $22.50 per share of Class A common stock (the midpoint of the price range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us and accounting for approximately $3.7 million of expenses previously paid by EELP in connection with this offering through December 31, 2021. |
(10) | Due to the uncertainty in the amount and timing of future exchanges of EELP Class B interests into shares of our Class A common stock by the other partners of EELP, and the uncertainty of when those exchanges will ultimately result in tax savings, the unaudited pro forma condensed consolidated financial information assumes that no exchanges of EELP interests have occurred and therefore no increases in tax basis in Excelerate’s assets or other tax benefits that may be realized thereunder have been assumed in the unaudited pro forma condensed consolidated financial information. However, if the other partners of EELP were to exchange all of their EELP Class B interests, we would recognize a total deferred tax asset of approximately $549.2 million and a related liability for payments under the Tax Receivable Agreement of approximately $404.2 million, assuming (i) that the other partners of EELP redeemed or exchanged all of their EELP interests immediately after the completion of this offering at an assumed initial public offering price of $22.50 per share of Class A common stock (the midpoint of the price range set forth on the cover of this prospectus), (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 Tax Receivable Agreement. These amounts are estimates and have been prepared for informational purposes only. The actual amount of deferred tax assets and related liabilities that we will recognize will differ based on, among other things, the timing of the exchanges, the price of shares of our Class A common stock at the time of the exchange and the tax rates then in effect. |
(11) | Reflects deferred costs associated with this offering, including certain legal, accounting and other related costs, which have been recorded in prepaid expenses and other current assets on the consolidated balance sheet. Upon completion of this offering, these deferred costs will be charged against the proceeds from this offering with a corresponding reduction to additional paid-in capital. |
(1) | This amount reflects the incremental operating costs associated with owning the Foundation Vessels during the year ended December 31, 2021, as if the vessels had been acquired on January 1, 2021. These incremental operating costs reflect the historical difference between actual expenses incurred by the Foundation in operating the Foundation Vessels and the fixed fee that EELP paid to the Foundation for this period for operating the Foundation Vessels. |
(2) | Reflects the net impact to depreciation expense as it relates to the acquisition of Excelsior. The unaudited pro forma condensed consolidated statement of income gives effect to the acquisition of Excelsior as if it had occurred as of January 1, 2021. The amortization expense previously recorded for Excelsior for the year ended December 31, 2021 was approximately $4.9 million based on the historical carrying value of the right of use asset. As an owned asset, the new depreciation amount of $5.9 million for the year ended December 31, 2021 is based on the purchase price of Excelsior. |
(3) | Reflects the removal of the interest expense incurred during the year ended December 31, 2021 related to the Foundation Vessels which were historically accounted for as finance leases. The unaudited pro forma condensed consolidated statement of income gives effect to the acquisition of Excelsior as if it had occurred as of January 1, 2021 and therefore no interest expense would have been incurred during this period in relation to these assets. |
(4) | Following the Transactions, we will be subject to U.S. federal income taxes, in addition to state and local taxes, with respect to our allocable share of any net taxable income of EELP. As a result, the unaudited pro forma condensed consolidated statements of income reflect net adjustments to our provision for income tax of $2.7 million for the year ended December 31, 2021. |
(5) | Following the Transactions, we will become (or our wholly owned subsidiary will become) the general partner of EELP. We will own 23.0% of the economic interest in EELP but will have 100% of the voting interest in and control the management of EELP. EE Holdings will own the remaining 77.0% of the economic interest in EELP, which will be accounted for as non-controlling interests in our future consolidated financial results. Through its ownership of shares of Class B common stock, EE Holdings will control a majority of the voting power of the common stock of Excelerate, the general partner of EELP, and will therefore have indirect control over EELP. |
(6) | This amount reflects the difference between the consideration given to acquire the Excellence vessel and the historical finance lease liability recorded for that vessel. The finance lease liability as of December 31, 2021 for the Excellence was approximately $123.5 million and the consideration provided to acquire the Excellence vessel was approximately $25 million of cash and $109.9 million of Class A Common Stock. As a result, the difference of approximately $11.4 million and the removal of $7.6 million related to prepaid drydocking costs, is being shown as a loss on the income statement and represents a nonrecurring cost relating to the Foundation Vessels acquisition. This non-recurring transaction-related cost is reflected as if incurred on January 1, 2021, the date the Transactions occurred for purposes of the unaudited pro forma condensed consolidated statement of income. |
(7) | Pro forma basic and diluted earnings per share is computed by dividing the net income attributable to holders of Class A common stock by the weighted-average shares of Class A common stock outstanding during the period. |
| | Year Ended December 31, 2021 | |
Numerator | | | |
Pro forma net income | | | $49,043 |
Less: Pro forma net income attributable to non-controlling interests | | | 41,654 |
Pro forma net income attributable to Excelerate | | | $7,389 |
Denominator | | | |
Pro forma weighted-average shares of Class A common stock outstanding—basic and diluted | | | 24,377,778 |
Pro forma earnings per share of Class A common stock—basic and diluted | | | $0.30 |
• | in Bangladesh, where we already operate two LNG terminals, we are developing Payra LNG, a fully integrated project including LNG supply, an LNG terminal and pipelines to supply a power plant and provide natural gas distribution to areas of the country with acute natural gas deficits. We are also in negotiations to expand our operations and the capacity of our MLNG terminal. In February 2022, we were notified that our technical proposal to expand the MLNG terminal had received approval in principle from Petrobangla and Bangladesh’s Energy and Mineral Resources Division, and we have commenced negotiations of the definitive agreements. Additionally, in March 2022, we began negotiations with Rupantarita Prakritik Gas Company Limited, a division of Petrobangla, for a long-term LNG supply and purchase agreement related to the expansion our MLNG terminal that could result in Excelerate selling up to 2 MTPA of LNG to Bangladesh over a 15-year term. We expect our Payra LNG project to follow a similar approval process through which we have demonstrated consistent recent success. |
• | in Albania, we signed a MOU in March 2021 with ExxonMobil and the Ministry of Infrastructure and Energy to conduct a feasibility study for the development of an LNG-to-power project at the port of Vlora. Under a second MOU signed in July 2021 with Albgaz and Snam, we will explore solutions to connect the Vlora LNG Terminal with other natural gas infrastructure, with the potential to satisfy the increasing energy security needs of neighboring countries in Europe. In line with these efforts, we responded to a request for proposal from the Albanian government to lease power barges to them on an emergency basis. In January 2022, we were notified that our offer had been qualified and awarded as the winner. We are now entering into negotiations of definitive commercial agreements and expect the power barges to commence service in the third quarter of 2022. The emergency power barge solution, which is aligned with our commitment to Albania’s energy future, would help mitigate Albania’s current energy crisis driven by the highly volatile cost of power imports from Europe, while also serving as a planned transition to our long-term LNG-to-power project; |
• | in the Philippines, we received a Notice to Proceed from the Department of Energy to develop the country’s first open-access LNG terminal in Batangas Bay and are also developing an additional opportunity to accompany the gateway to deliver natural gas to downstream users regardless of location or size using technology solutions, including small-scale LNGCs and LNG shipping containers loaded onto trucks; |
• | in Vietnam, we are in active discussions and have signed MOUs with potential project partners to bring our LNG know-how and technical expertise to this market; and |
• | in Brazil, we successfully leased the Bahia Terminal from Petrobras, where in December 2021 we deployed one of our existing FSRUs and started to import LNG and sell regasified natural gas. |
| | Year Ended December 31, | | |||||||
| | 2021 | | | 2020 | | ||||
| | (in thousands) | ||||||||
FSRU and terminal services revenues | | | $468,030 | | | $ 430,843 | | |||
Gas sales revenues | | | 420,525 | | | — | | |||
Cost of revenue and vessel operating expenses | | | 192,723 | | | 150,478 | | |||
Direct cost of gas sales | | | 390,518 | | | — | | |||
Depreciation and amortization expense | | | 104,908 | | | 104,167 | | |||
Gross Margin | | | 200,406 | | | 176,198 | | |||
Depreciation and amortization expense | | | 104,908 | | | 104,167 | | |||
Adjusted Gross Margin | | | $305,314 | | | $280,365 | |
| | Year Ended December 31, | | |||||||
| | 2021 | | | 2020 | | ||||
| | (in thousands) | ||||||||
Net income | | | $41,189 | | | $32,891 | | |||
Interest expense | | | 80,814 | | | 89,430 | | |||
Provision for income taxes | | | 21,168 | | | 13,937 | | |||
Depreciation and amortization expense | | | 104,908 | | | 104,167 | | |||
Restructuring, transition and transaction expenses | | | 13,974 | | | — | | |||
Adjusted EBITDA | | | 262,053 | | | 240,425 | | |||
Vessel and infrastructure rent expense | | | 28,998 | | | 15,772 | | |||
Adjusted EBITDAR | | | $291,051 | | | $256,197 | |
| | Year ended December 31, | | | Change | |||||||
| | 2021 | | | 2020 | | ||||||
| | (in thousands) | | | ||||||||
Revenues | | | | | | | | | ||||
FSRU and terminal services | | | $ 468,030 | | | $ 430,843 | | | $37,187 | | | 9% |
Gas sales | | | 420,525 | | | — | | | 420,525 | | | |
Total revenues | | | 888,555 | | | 430,843 | | | 457,712 | | | 106% |
Operating expenses | | | | | | | | | ||||
Cost of revenue and vessel operating expenses | | | 192,723 | | | 150,478 | | | 42,245 | | | 28% |
Direct cost of gas sales | | | 390,518 | | | — | | | 390,518 | | | |
Depreciation and amortization | | | 104,908 | | | 104,167 | | | 741 | | | 1% |
Selling, general and administrative | | | 47,088 | | | 42,942 | | | 4,146 | | | 10% |
Restructuring, transition and transaction expenses | | | 13,974 | | | — | | | 13,974 | | | |
Total operating expenses | | | 749,211 | | | 297,587 | | | 451,624 | | | 152% |
Operating income | | | 139,344 | | | 133,256 | | | 6,088 | | | 5% |
Other income (expense) | | | | | | | | | ||||
Interest expense | | | (31,892) | | | (37,460) | | | 5,568 | | | (15%) |
Interest expense – related party | | | (48,922) | | | (51,970) | | | 3,048 | | | (6%) |
Earnings from equity-method investment | | | 3,263 | | | 3,094 | | | 169 | | | 5% |
Other income, net | | | 564 | | | (92) | | | 656 | | | (713%) |
Income before income taxes | | | 62,357 | | | 46,828 | | | 15,529 | | | 33% |
Provision for income taxes | | | (21,168) | | | (13,937) | | | (7,231) | | | 52% |
Net income | | | 41,189 | | | 32,891 | | | 8,298 | | | 25% |
Less net income attributable to non-controlling interests | | | 3,035 | | | 2,622 | | | 413 | | | 16% |
Less net income attributable to non-controlling interests – ENE Onshore | | | (2,964) | | | (8,484) | | | 5,520 | | | (65%) |
Net income attributable to EELP | | | $41,118 | | | $38,753 | | | $2,365 | | | 6% |
Additional financial data: | | | | | | | | | ||||
Gross Margin | | | $200,406 | | | $176,198 | | | $24,208 | | | 14% |
Adjusted Gross Margin | | | 305,314 | | | 280,365 | | | 24,949 | | | 9% |
Adjusted EBITDA | | | 262,053 | | | 240,425 | | | 21,628 | | | 9% |
Adjusted EBITDAR | | | 291,051 | | | 256,197 | | | 34,854 | | | 14% |
Capital expenditures | | | 36,091 | | | 41,258 | | | (5,167) | | | (13%) |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | ||||||||
Net cash provided by (used in): | | | | | | | |||
Operating activities | | | $141,613 | | | $108,964 | | | $32,649 |
Investing activities | | | (36,091) | | | (41,258) | | | 5,167 |
Financing activities | | | (124,097) | | | (31,438) | | | (92,659) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | | | ($18,575) | | | $ 36,268 | | | ($54,843) |
• | a $334.0 million increase in accounts payable due to December 2021 LNG purchases for December 2021 and January 2022 natural gas sales; |
• | a $8.3 million increase in net income, as described in “—Consolidated Results of Operations—Net income”; |
• | 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 |
• | partially offset by a $244.7 million increase in accounts receivables primarily due to December 2021 natural gas sales. |
• | 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; |
• | 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 emerging growth company; |
• | 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; |
• | 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 |
• | 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. |
• | we did not design and maintain effective controls over period end financial reporting processes and procedures, controls over significant accounts and disclosures to achieve complete, accurate and timely financial accounting, reporting and disclosures, including segregation of duties and controls related to the preparation and review of journal entries. Additionally, we did not design and maintain effective controls to identify and account for the elimination of certain intercompany revenue and expenses; |
• | we did not design and maintain effective controls over the proper timing of revenue recognition for dry-dock revenue contracts; |
• | we did not design and maintain effective controls to analyze compliance with non-financial debt covenants and conditions; and |
• | we did not design and maintain effective controls to verify the completeness and accuracy of our income tax provision. |
• | Commonality: Our FSRUs are designed to allow almost seamless substitutions, resulting in a lower risk of failure and a greater ability to upgrade services to existing customers. |
• | Operation conditions: Most of our FSRUs are equipped with dual connection mode (buoy or alongside a jetty) and reinforced membrane containment. This allows us to operate in a wide array of weather and locations. Additionally, we can operate on both warm or cold seawater environments. |
• | Conventional LNG shipping capabilities: All our FSRUs are capable of operating as conventional LNGCs without any modifications or extra preparations. |
• | Reduced implementation risk – Simplified structure allows for the alignment of interest amongst all stakeholders to the project (e.g., engineering, procurement, construction, installation, commissioning, contractors, ship owners, creditors and regulators), thereby reducing the risk of delay or failure during the implementation of the project. |
• | Reduced interface risk – During construction, the concurrent delivery of FSRU with the mechanical completion of all necessary marine infrastructure of the terminal. During operations, commissioning and operating the entire terminal seamlessly to regasify LNG and deliver natural gas to at a custody transfer point onshore. |
• | Streamlined administration – Customers benefit from a single point of responsibility for all contractual obligations reducing the complexity and risk of prolonged disputes with multiple counterparties for potential performance failures. |
• | Cost synergies – Integrated structures allow companies to capture potential cost synergies during project development, which can in turn can be passed through to the customer. |
• | LNG-to-power developers. In many of our markets, we compete with other LNG-to-power companies, including New Fortress Energy and AES. Our investment strategy is focused on leveraging our FSRU expertise and local operational experience and relationship development to drive the expansion of incremental infrastructure projects downstream of our terminals. Our focus on the LNG-to-power value chain allows us to develop higher quality projects and enhances our ability to compete for new opportunities, as our host governments consider incremental investments to meet their growing energy demand needs. |
• | Large LNG producers. When compared to major LNG producers such as Qatargas, Shell, ExxonMobil, BP and Total Energies, we believe we are better positioned to open and expand new markets given our expertise in the downstream portion of the LNG value chain. Our focus is on helping LNG producers |
• | FSRU / LNGC owners. As the owner and operator of the largest FSRU fleet employed for regasification in the industry, we compete with FSRU and LNGC owners such as New Fortress Energy (following its acquisition of Hygo Energy Transition and Golar LNG Partners), Hoegh LNG and GasLog. We distinguish ourselves by providing customers the ability to expand our service as their energy demands increase. This flexible approach, focused on optimizing services by swapping smaller FSRUs for larger ones, performing technical upgrades and offering seasonal service when required, fosters trust and long-term relationships with our customers. We believe the fundamentals supporting the FSRU business model require operators to focus on reliability, value and service, combined with disciplined expansion and growth. |
• | Experienced LNG Leader and Proven Ability to Execute. We are an admired player within the LNG industry with significant experience across the value chain. Our experienced team and proven LNG solutions, including the industry's largest FSRU fleet employed for regasification, more than 2,200 STS transfers of LNG with over 40 LNG operators and the development or operation of 15 LNG import terminals, make us a market leader and a trusted partner for countries who seek to improve their access to energy. We have nearly two decades of development, construction and operational experience, making us one of the most accomplished, reliable and capable LNG companies in the industry. Our team’s in-depth experience and local presence enable us to support energy hubs by sourcing and aggregating LNG from the global market for delivery downstream, ensuring the long-term stability, reliability, and independence of customers’ energy supply. |
• | Positioned to Meet Growing Global Demand for Cleaner Energy. According to the IEA’s most recent semi-annual Electricity Market Report, global electricity demand rebounded strongly in 2021, growing by close to 6% over the prior year, and is expected to increase by approximately 3% annually in 2022 and 2023. With the demand for power generation growing worldwide, direct access to diverse, affordable and reliable energy sources such as LNG has become a critical enabler for economic growth and improving the quality of life across the globe. LNG provides an abundant, competitive and cleaner energy source to meet the world’s growing demand for power. It is also an efficient means to displace coal, which is a higher carbon intensity fuel compared to natural gas. Despite its advantages, LNG access is not readily available in many emerging markets due to the complexity of LNG import projects. We have an established reputation for developing and operating complex LNG solutions and are a trusted operator with a strong track record of bringing reliability, resiliency and flexibility to energy systems. |
• | Full-Service, Integrated LNG Business Model Provides Competitive Advantage. As market dynamics and the energy needs of customers have evolved over time, we embraced the opportunity to expand beyond our FSRU business. Today, we are addressing the need for increased access to LNG with our fully integrated business model that manages the LNG supply chain from procurement until final delivery to end users. We plan to help our customers meet their growing energy demand by providing an array of products, including LNG terminal services, natural gas supply procurement and distribution, LNG-to-power projects and a suite of smaller-scale gas distribution solutions. By offering our customers flexible, fully integrated and tailored LNG solutions, we are able to increase the financial value of these opportunities while enabling our customers to safely and efficiently access the energy they need. |
• | Well-Established FSRU Business Supported by Dependable Revenue Base. We own and operate the largest FSRU fleet employed for regasification in the industry. The success of our well established FSRU business is highlighted by our ability to secure long-term, take-or-pay contracts that generate consistent revenue and cash flow with minimal exposure to commodity price volatility. Our ability to swap FSRUs |
• | Understanding of LNG Market Dynamics Allows for Portfolio Optimization. We leverage our expertise and understanding of LNG market dynamics to create significant value though our LNG marketing and supply business. Our worldwide market access and ability to buy LNG from major LNG producers and traders gives us the chance to capture additional value via portfolio optimization and provides incremental cash flow. Even more importantly, our access to diverse, uncorrelated markets, including New England and Brazil, generates valuable arbitrage opportunities. We are structuring our business to be able to maximize this extra value from LNG supply to GSAs and PPAs. Our strategy of integrating LNG supply, natural gas sales and terminal operations, gives us the ability to optimize our FSRU fleet utilization. |
• | Proven Management Team. Our management team has experience in all aspects of the LNG value chain and a strong balance of technical, commercial, operational, financial, legal and management skills. Steven Kobos, our President and Chief Executive Officer, has over 27 years of experience working on complex energy and infrastructure development projects and general maritime operations, specifically LNG shipping, FSRUs, chartering of vessels, shipbuilding contracts, operational agreements and related project finance and tax matters, and he has helped establish Excelerate as a growing and profitable international energy company. Daniel Bustos, our Executive Vice President and Chief Commercial Officer, has over 24 years of experience leading commercial development of oil and gas projects across the globe, with a particular focus on LNG, and is responsible for the commercial development of our LNG import projects, expansion of our customer base and the buildout of our global network of regional offices. Dana Armstrong, our Executive Vice President and Chief Financial Officer, provides oversight of all global financial reporting, financial planning and analysis, accounting, treasury, tax, financial systems and internal controls and has led both public and private multinational companies within the energy and biotechnology industries over her 25-year career. Calvin Bancroft, our Executive Vice President and Chief Operating Officer, has over 40 years of experience in the shipping industry, with recognized expertise in maritime security, chartering, supply chain management and operational logistics. Alisa Newman Hood, our Executive Vice President and General Counsel, has 20 years of worldwide legal, government relations and energy policy experience. Amy Thompson, our Executive Vice President and Chief Human Resources Officer, has over 22 years of human resources experience in global oil field services organizations and has held various leadership roles in the United States and the Middle East. |
• | Continue to develop our existing, diversified regasification business, supported by our large purpose- built FSRU fleet. Our current markets are essential to maintaining our solid foundation of revenues and providing new opportunities for downstream growth. Our persistent market presence helps ensure that we will be well positioned to compete for new growth opportunities as our host governments seek new investment to meet their growing energy needs. In order to continue to develop our existing, diversified regasification business, we plan to use our brand recognition and strategic commercial actions to develop a reputation as more than an FSRU provider. Maintaining a strong presence will require that our teams continue to place a high priority on operational excellence, active management of technical obsolescence, operation and maintenance improvements and fleet optimization. |
• | Pursue opportunities downstream of existing markets. With established terminals, existing markets provide opportunities for us to structure end-to-end natural gas supply products and cleaner power solutions for our customers. We expect the organic growth of our business to be accompanied by strategic acquisitions for new or existing projects, in order to enhance our growth trajectory. As we integrate new infrastructure assets downstream of our floating LNG terminals, we will be required to make investments in new products and technologies to ensure that we are positioned for success in a lower-carbon energy future. We anticipate that increasing global demand for electricity generation, more efficient access to natural gas and decarbonization initiatives will be the primary drivers of opportunity, and we intend to diversify our product portfolio responsibly and in a manner that reinforces our broader goals of improving access to cleaner, more affordable and reliable energy, creating sustainable growth and combatting climate change. Our local teams will be key to expanding and diversifying our commercial, technical and financial expertise in our existing markets. |
• | Utilize our global presence to enter new, growing markets. We plan to use our existing markets as a springboard into new countries and regions. Our ability to cultivate meaningful partnerships and successfully acquire equity interests in projects will be a determining factor in how quickly we are able to achieve critical mass in new markets. We are currently developing a set of integrated LNG projects in Albania, the Philippines and Bangladesh. We consider these projects to be in advanced development and estimate that these projects together represent $1 billion in future capital investment. We are evaluating and pursuing over twenty additional early-stage projects with opportunities in the Middle East, Africa, Europe, Latin America and Asia. |
• | Create a sizable, diversified LNG procurement portfolio. Our expansion downstream will offer us the opportunity to establish valuable access to a worldwide network of natural gas markets. Our network of supply and charter contracts and reputation with major LNG producers provide us with ample opportunities to grow our LNG portfolio on competitive terms. This diversified portfolio will give us the opportunity to better manage the typical uncertainties of local demand (weather seasonality, economic cycles, availability of renewables, etc.), while capturing arbitrage opportunities. For example, we have already demonstrated the value of accessing the New England market in a flexible way. With the addition of new market access points in Asia, Europe, Africa and South America, we can capture value from our LNG procurement portfolio, above the margins generated in individual markets. Finally, this LNG portfolio will help further enhance our competitive edge for new opportunities, allowing us to offer more flexible and cost-effective products to new customers. |
• | Maintain our disciplined investment philosophy. As we grow our business, we are committed to maintaining our disciplined investment philosophy and prudent approach to project development. We have established a proven track record of investing in the right projects which has resulted in higher project returns and consistent earnings results. We also strive to negotiate the terms of our contracts in a manner that seeks to minimize any potential commodity risk. It is our aim to have an industry leading portfolio of high-return growth opportunities that will support sustainable and profitable growth for years to come. We expect our contract portfolio to evolve over time to include long-term contracts as well as shorter-term agreements that will create opportunities to capture additional upside. |
1. | Peak send-out capacity dependent on local conditions, including operating pressure and seawater temperature. |
2. | Represents the number of ports where each vessel has provided regasification services throughout its lifetime. |
• | port services – providing tugboats, supply boats and crew boats; |
• | LNG procurement support – supporting STS transfers dockside or offshore; |
• | LNG regasification – providing FSRUs, floating storage with onshore regasification, onshore storage or a combination thereof; |
• | permitting services – obtaining environmental, construction and operating permits; |
• | EPCIC services – providing engineering, procurement, construction, installation and commissioning services; and |
• | operations and management services – supporting vessels and terminals. |
Name | | | Age | | | Position |
Steven M. Kobos | | | 57 | | | President, Chief Executive Officer and Director |
Dana A. Armstrong | | | 50 | | | Executive Vice President and Chief Financial Officer |
Calvin (Cal) A. Bancroft | | | 70 | | | Executive Vice President and Chief Operating Officer |
Daniel H. Bustos | | | 50 | | | Executive Vice President and Chief Commercial Officer |
Alisa Newman Hood | | | 47 | | | Executive Vice President, General Counsel and Secretary |
Amy Thompson Broussard | | | 45 | | | Executive Vice President and Chief Human Resources Officer |
Michael A. Bent | | | 55 | | | Vice President, Controller and Chief Accounting Officer |
Carolyn J. Burke | | | 54 | | | Director Nominee |
Paul T. Hanrahan | | | 64 | | | Director Nominee |
Henry G. Kleemeier | | | 77 | | | Director Nominee |
Don P. Millican | | | 69 | | | Director Nominee and Chairperson |
Robert A. Waldo | | | 46 | | | Director Nominee |
• | a majority of such company’s board of directors consist of independent directors; |
• | such company have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing such committee’s purpose and responsibilities; |
• | such company have a compensation committee that is composed entirely of independent directors with a written charter addressing such committee’s purpose and responsibilities; and |
• | such company conduct an annual performance evaluation of the nominating and governance and compensation committees. |
• | Steven M. Kobos, our President and Chief Executive Officer; |
• | Daniel H. Bustos, our Executive Vice President & Chief Commercial Officer; and |
• | Alisa Newman Hood, our Executive Vice President & General Counsel. |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($)(1)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) |
Steven A. Kobos | | | 2021 | | | 900,000 | | | — | | | 463,500 | | | 71,687 | | | 1,435,187 |
President and Chief Executive Officer | | | 2020 | | | 900,000 | | | — | | | 400,000 | | | 82,026 | | | 1,382,026 |
Daniel H. Bustos | | | 2021 | | | 656,200 | | | 180,000 | | | 153,400 | | | 14,354 | | | 1,003,954 |
Chief Commercial Officer | | | 2020 | | | 656,258 | | | 110,000 | | | 217,000 | | | 11,850 | | | 995,108 |
Alisa Newman Hood | | | 2021 | | | 437,500 | | | 300,000 | | | 310,500 | | | 494 | | | 1,048,494 |
General Counsel | | | | | | | | | | | | |
(1) | Mr. Bustos was granted a retention bonus in an aggregate amount of $320,000 in March 2020, $80,000 of which was paid to Mr. Bustos in March of 2020, $80,000 was paid in March of 2021 and the remainder of which will become payable in two equal annual installments subject to Mr. Bustos continued employment through each applicable payment date. In addition, for each of 2021 and 2020, Mr. Bustos received a discretionary bonus of $100,000 and $30,000 in addition to the annual bonus earned under the Company’s Short Term Incentive Plan. |
(2) | Ms. Newman Hood received a guaranteed bonus in March of 2021 in connection with her commencement of employment in accordance with the terms of her offer letter. |
(3) | Amounts in this column reflect annual bonus amounts earned under our Short Term Incentive Compensation Plan for the applicable year. |
(4) | Amounts in this column for 2021 represent for Mr. Kobos, life and AD&D premiums paid on his behalf ($1,290), a tax gross-up ($64) provided with respect to a work-from-home COVID stipend that was provided to all employees, matching contributions made to the executive’s account under our 401(k) plan ($11,600) and certain housing expenses paid for by us ($58,733); for Mr. Bustos, life and AD&D premiums paid on his behalf ($690), a tax gross-up ($64) provided with respect to a work-from-home COVID stipend that was provided to all employees, matching contributions made to the executive’s account under our 401(k) plan ($11,600) as well as certain gym membership fees, and for Ms. Newman Hood, life AD&D premiums paid on her behalf ($415) and a tax gross-up ($79) provided with respect to a work-from-home COVID stipend that was provided to all employees. |
• | Adjusted EBITDA (weighted 45%) – achieved at 102% of target; |
• | Operating and G&A Expenses (weighted 10%) – achieved at 94% of target; |
• | Capital Expenditures (weighted at 10%) – achieved at 113% of target; and |
• | Safety Metrics (weighted at 15%) – achieved at 110% of target. |
• | Mr. Kobos achieved 100% of his Individual and Strategic Goals for 2021, comprised of: enhancing our safety culture, advancing the Gas and Power/Downstream business strategy, and developing capabilities for the next phase of Excelerate Energy; |
• | Mr. Bustos achieved 116% of his individual and Strategic Goals for 2021, comprised of: enhancing our safety culture, enhancing and growing the Company’s Trading and Sub chartering budget in 2021, Extending of the current charter on any current Excelerate Energy deals, and advancing the Gas and Power/downstream strategy; and |
• | Ms. Newman Hood achieved 110% of her Individual and Strategic Goals for 2021, comprised of: enhancing our safety culture, supporting and enabling business growth and strategy achievement through strong legal partnership, and minimizing risk in Company contracts. |
• | a lump sum cash severance payment equal to a specified multiple of the executive’s base salary and target annual bonus amount (under the executive severance plan this will be 2.0X for our CEO, 1.5X for the other NEOs and under the change in control severance plan this will increase to 2.99X for our CEO and 2.0X for the other NEOs); |
• | a pro rata target annual bonus payment for the year of termination; |
• | continued coverage (or a cash payment in lieu of such continued coverage) for the participant and his or her covered eligible dependents to continue medical, dental and vision coverage for 24 months for the CEO and 18 months for the other NEOs (increasing to 30 months and 24 months, respectively, under the change in control severance plan); and |
• | certain outplacement services. |
• | an annual cash retainer of $60,000; |
• | an annual equity retainer in the form of restricted stock units that vests on the one-year anniversary of the date of grant with a grant date value of $125,000; and |
• | additional annual cash retainers of $20,000, $15,000, and $12,000, respectively, for serving as the chairperson of the Audit Committee, Compensation Committee, or Nominating and Corporate Governance Committee. |
| | Before the Offering | | | After the Offering if Underwriters’ Option is Not Exercised | |||||||||||||
Name and Address of Beneficial Owner | | | Class A Common Stock Number | | | Class B Common Stock Number | | | Total Voting Power % | | | Class A Common Stock Number | | | Class B Common Stock Number | | | Total Voting Power % |
Named Executive Officers, Directors and Director Nominees: | | | | | | | | | | | | | ||||||
Steven M. Kobos | | | — | | | — | | | — | | | — | | | — | | | — |
Daniel H. Bustos | | | — | | | — | | | — | | | — | | | — | | | — |
Alisa Newman Hood | | | — | | | — | | | — | | | — | | | — | | | — |
Henry G. Kleemeier | | | — | | | — | | | — | | | — | | | — | | | — |
Carolyn J. Burke | | | — | | | — | | | — | | | — | | | — | | | — |
Paul T. Hanrahan | | | — | | | — | | | — | | | — | | | — | | | — |
Don P. Millican | | | — | | | — | | | — | | | — | | | — | | | — |
Robert A. Waldo | | | — | | | — | | | — | | | — | | | — | | | — |
All executive officers and directors as a group (12 persons) | | | — | | | — | | | — | | | — | | | — | | | — |
5% and Greater Stocholders: | | | | | | | | | | | | | ||||||
Excelerate Energy Holdings, LLC(1) | | | — | | | 81,497,778 | | | 100 | | | — | | | 81,497,778 | | | 77.0 |
Maya Maritime LLC(2) | | | — | | | — | | | — | | | 8,377,778 | | | — | | | 7.9 |
(1) | Represents shares of our Class B common stock held by EE Holdings. EE Holdings is owned 49.5% by Excelerate Holdings, LLC, an Oklahoma limited liability company (“Excelerate Holdings”), and 50.5% by George B. Kaiser. Excelerate Holdings is majority owned by Mr. Kaiser. Mr. Kaiser may be deemed to beneficially own the shares held by EE Holdings. Mr. Kaiser disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein. The principal business address of EE Holdings is 6733 South Yale Ave., Tulsa, Oklahoma 74136. |
(2) | Represents shares of our Class A common stock held by Maya Maritime LLC, a wholly owned subsidiary of the Foundation. Mr. Frederic Dorwart, Mr. Phil Frohlich and Mr. Phil Lakin, Jr. are trustees of the Foundation (the “Trustees”) and by virtue of such position may be deemed to (a) share voting and investment control over and (b) may be deemed to have a beneficial ownership in the shares held by the Foundation. Each of the Trustees disclaims beneficial ownership of the reported securities. The principal business address of the Foundation is 7030 South Yale Ave, Suite 600, Tulsa, Oklahoma 74136. Each $1.00 increase or decrease in the assumed initial public offering price of $22.50 per share of Class A common stock (the midpoint of the price range set forth on the cover of this prospectus) would increase or decrease the number of shares of Class A common stock exchanged for the Foundation Vessels by approximately 375,000 shares, which would increase or decrease the Foundation's indirect ownership percentage of our common stock by approximately 0.3%. |
• | the timing of purchases or future exchanges—for instance, the increase in any tax deductions will vary depending on the fair market value, which may fluctuate over time, of the depreciable or amortizable assets of EELP at the time of each purchase of interests from the TRA Beneficiaries in this offering or each future exchange; |
• | the price of shares of our Class A common stock at the time of the purchase or exchange—the tax basis increase in the assets of EELP is directly related to the price of shares of our Class A common stock at the time of the purchase or exchange; |
• | the extent to which such purchases or exchanges are taxable—if the purchase of interests from a TRA Beneficiary in connection with this offering or any future exchange is not taxable for any reason, increased tax deductions will not be available; |
• | the tax basis of the Foundation Vessels and the depreciation deductions resulting from such tax basis; |
• | the amount, timing and character of Excelerate’s income—we expect that the Tax Receivable Agreement will require Excelerate to pay 85% of the net cash tax savings as and when deemed realized. If Excelerate does not have taxable income during a taxable year, Excelerate generally will not be required (absent a change in control or other circumstances requiring an early termination payment) to make payments under the Tax Receivable Agreement for that taxable year because no benefit will have been realized. However, any tax benefits that do not result in net cash tax savings in a given tax year may generate tax attributes that may be used to generate net cash tax savings in previous or future taxable years. The use of any such tax attributes will generate net cash tax savings that will result in payments under the Tax Receivable Agreement; and |
• | U.S. federal, state and local tax rates in effect at the time that we are deemed to realize the relevant tax benefits. |
• | liquidation, dissolution or winding up of our company; |
• | any material change in the nature of the business or operations of our company and our subsidiaries, taken as a whole, as of the date of the Stockholder’s Agreement; |
• | authorizing or issuing any equity securities having rights, preferences or privileges superior or senior to the outstanding shares of Class A common stock or Class B common stock (or any securities convertible or exchangeable therefor pursuant to their terms); |
• | any increase or decrease in the size of (x) our board of directors from the initial number of directors set at the time of this offering or (y) any board of a subsidiary of our company; |
• | adopting or implementing any stockholder rights plan or similar takeover defense measure; and |
• | amendments to, or modification or repeal of, organizational documents (such as our amended and restated certificate of incorporation and our amended and restated bylaws or equivalent organizational documents of our subsidiaries) that adversely affect the EE Holdings (including its permitted transferees) or its affiliates. |
• | hiring or terminating the Chief Executive Officer of our company and his or her successors; |
• | any change in the size of (x) any committee of our board of directors (as compared to the size approved in connection with this offering) or (y) any committee of any board of our subsidiaries; |
• | forming any new committee of our board of directors (other than committees formed in connection with this offering); |
• | any mergers or other transaction that, if consummated, would constitute a “change in control” (as defined in the Stockholder’s Agreement) or entering into any definitive agreement or series of related agreements that govern any transaction or series of related transactions that, if consummated, would result in a “change in control”; |
• | entering into any agreement providing for the acquisition or divestiture of assets or persons, in each such case, involving consideration payable or receivable by our company or any of our subsidiaries in excess of $100 million in the aggregate in any single transaction or series of related transactions during any 12-month period; |
• | any incurrence by our company or any of our subsidiaries of indebtedness for borrowed money (including through capital leases, the issuance of debt securities or the guarantee of indebtedness of another person) in excess of $100 million in the aggregate in any single transaction or series of related transactions during any 12-month period, other than indebtedness incurred under an existing (prior to the closing of this offering) and previously approved revolving credit facility; |
• | any issuance or series of related issuances of equity securities by our company or any of our subsidiaries, other than grants of equity securities under any equity compensation plan, including an employee stock purchase plan, approved by our board of directors or a committee thereof; and |
• | any payment or declaration of any dividend or other distribution of any shares of Class A common stock or Class B common stock or entering into any similar recapitalization transaction the primary purpose of which is to pay a dividend of shares of Class A common stock or Class B common stock. |
• | Kaiser issued guarantees dated December 1, 2015 in favor of all creditors and obligees of ENE Onshore and ENE Lateral under their third-party contracts. The Kaiser guarantees issued in favor of ENE Lateral and ENE Onshore were terminated in connection with the Northeast Gateway Contribution. |
• | Kaiser issued a guarantee dated September 11, 2013 (and reaffirmed on December 1, 2015) in favor of Algonquin Gas Transmission, LLC (“AGT”) and Maritimes & Northeast Pipeline, L.L.C. (each a wholly owned subsidiary of Enbridge, Inc.), in respect of all payment obligations owed by ENE Onshore and ENE Lateral (the “AGT Guarantee”). In addition, Kaiser obtained a letter of credit on behalf of ENE Onshore and ENE Lateral (the “AGT LOC”). The amount available for drawing under the AGT LOC reduces monthly and was approximately $9.9 million as of March 25, 2022. In connection with the Northeast Gateway Contribution, EELP agreed to (i) indemnify Kaiser in respect of Kaiser’s obligations related to ENE Lateral under the AGT Guarantee and AGT LOC, (ii) pay an annual fee in the amount of $1.2 million (pro-rated based on the number of days such guarantee remains outstanding in any year (beginning September 17, 2021)) to Kaiser to maintain such AGT Guarantee and (iii) reimburse Kaiser for any fees actually incurred under the AGT LOC. |
• | Kaiser issued an uncapped construction and operational guarantee dated May 14, 2007 in favor of the Secretary of Transportation, United States of America, as represented by the Maritime Administrator (“MARAD”), in respect of Northeast Gateway Energy Bridge, LP’s obligations related to design, construction, operations and decommissioning under the deepwater port license issued by MARAD (the “Kaiser – MARAD Guarantee”). In addition, Kaiser obtained a letter of credit in favor of MARAD to cover decommissioning costs in the amount of approximately $15.4 million (the “Kaiser – MARAD LOC”), which Kaiser – MARAD LOC was amended and increased to $16.3 million in December 2021. In connection with the Northeast Gateway Contribution, EELP agreed to (i) indemnify Kaiser in respect of Kaiser’s obligations under the Kaiser-MARAD Guarantee and the Kaiser – MARAD LOC, (ii) pay a nominal fee to Kaiser to maintain such Kaiser-MARAD Guarantee and (iii) reimburse Kaiser for any fees actually incurred under the MARAD LOC. |
• | tax consequences to holders who may be subject to special tax treatment, such as brokers and dealers in securities, currencies or commodities, banks and financial institutions, regulated investment companies, real estate investment trusts, insurance companies, tax-exempt entities, governmental organizations, qualified foreign pension funds, traders in securities that elect to use a mark-to-market method of accounting for their securities, certain former citizens or long-term residents of the United States, “controlled foreign corporations” and “passive foreign investment companies”; |
• | tax consequences to persons holding shares of our Class A common stock as part of a hedging, integrated, or conversion transaction or a straddle or persons deemed to sell shares of our Class A common stock under the constructive sale provisions of the Code; |
• | tax consequences available to persons that will hold our Class A common stock in an individual retirement account, 401(k) plan or similar tax-favored account; |
• | persons who hold or receive our Class A common stock pursuant to the exercise of any employee stock option or otherwise as compensation; |
• | tax consequences to partnerships or other pass-through entities for U.S. federal income tax purposes and investors in such entities; |
• | unless otherwise specifically stated, tax consequences to holders who own or have owned, actually or constructively, more than five percent of our Class A Common Stock; or |
• | alternative minimum tax consequences, if any. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation created or organized in or under the laws of the United States or any State thereof (including the District of Columbia); |
• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust, the administration of which is subject to the primary supervision of a court within the United States and for which one or more U.S. persons have the authority to control all substantial decisions, or that has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person. |
• | such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business within the United States and, if the Non-U.S. Holder is entitled to claim treaty benefits (and the Non-U.S. Holder complies with applicable certification and other requirements), is attributable to a permanent establishment maintained by the Non-U.S. Holder within the United States; |
• | such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or |
• | we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes (which we refer to as a “USRPHC”) at any time within the shorter of the five-year period ending on the date of disposition or the period that such Non-U.S. Holder held shares of our Class A common |
Underwriters | | | Number of Shares |
Barclays Capital Inc. | | | |
J.P. Morgan Securities LLC | | | |
Morgan Stanley & Co. LLC | | | |
Wells Fargo Securities, LLC | | | |
SMBC Nikko Securities America, Inc. | | | |
Raymond James & Associates, Inc. | | | |
Stephens Inc. | | | |
Tudor, Pickering, Holt & Co. Securities, LLC | | | |
BOK Financial Securities, Inc. | | | |
Total | | | 16,000,000 |
• | the obligation to purchase all of the shares of Class A common stock offered hereby (other than those shares of Class A common stock covered by their option to purchase additional shares as described below), if any of the Class A shares are purchased; |
• | the representations and warranties made by us to the underwriters are true; |
• | there is no material change in our business or the financial markets; and |
• | we deliver customary closing documents to the underwriters. |
| | |||||
| | No Exercise | | | Full Exercise | |
Per Share | | | $ | | | $ |
Total | | | $ | | | $ |
• | the history and prospects for the industry in which we compete; |
• | our financial information; |
• | the ability of our management and our business potential and earning prospects; |
• | the prevailing securities markets at the time of this offering; and |
• | the recent market prices of, and the demand for, publicly traded shares of generally comparable companies. |
• | Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. |
• | A short position involves a sale by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase in the offering, which creates the syndicate short position. This short position may be either a covered short position or a naked short position. In a covered short position, the number of shares involved in the sales made by the underwriters in excess of the number of shares they are obligated to purchase is not greater than the number of shares that they may purchase by exercising their option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in their option to purchase additional shares. The underwriters may close out any short position by either exercising their option to purchase additional shares and/or purchasing shares in the open market. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering. |
• | Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. |
• | Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. |
• | to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation; |
• | to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or |
• | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
• | to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation; |
• | to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or |
• | in any other circumstances falling within Section 86 of the FSMA. |
• | a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or |
• | a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, |
• | to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; |
• | where no consideration is or will be given for the transfer; |
• | where the transfer is by operation of law; |
• | as specified in Section 276(7) of the SFA; or |
• | as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore. |
• | to persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money; or |
• | to persons who in all the circumstances can properly be regarded as having been selected otherwise than as members of the public; or |
• | to persons who are each required to pay a minimum subscription price of at least NZ$500,000 for the shares before the allotment of those shares (disregarding any amounts payable, or paid, out of money lent by the issuer or any associated person of the issuer); or |
• | in other circumstances where there is no contravention of the Securities Act 1978 of New Zealand (or any statutory modification or re-enactment of, or statutory substitution for, the Securities Act 1978 of New Zealand). |
| | Page(s) | |
Audited Balance Sheet of Excelerate Energy, Inc. | | | |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
Audited Consolidated Financial Statements of Excelerate Energy Limited Partnership | | | |
| | ||
| | ||
| | ||
Consolidated Financial Statements: | | | |
| | ||
| | ||
| | ||
| | ||
| | ||
| |
1. | Organization and Nature of the Business |
2. | Summary of Significant Accounting Policies |
3. | Subsequent Events |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
ASSETS | | | | | ||
Current assets | | | | | ||
Cash and cash equivalents | | | $72,786 | | | $90,240 |
Current portion of restricted cash | | | 2,495 | | | 2,456 |
Accounts receivable, net | | | 260,535 | | | 18,524 |
Accounts receivable, net - related-party | | | 11,140 | | | 5,977 |
Inventories | | | 105,020 | | | 22,354 |
Current portion of net investments in sales-type leases | | | 12,225 | | | 10,229 |
Other current assets | | | 26,194 | | | 17,993 |
Total current assets | | | 490,395 | | | 167,773 |
Restricted cash | | | 15,683 | | | 16,843 |
Property and equipment, net | | | 1,433,169 | | | 1,501,528 |
Operating lease right-of-use assets | | | 106,225 | | | 114,617 |
Net investments in sales-type leases | | | 412,908 | | | 425,133 |
Investment in equity method investee | | | 22,051 | | | 16,330 |
Other assets | | | 20,305 | | | 13,500 |
Total assets | | | $2,500,736 | | | $2,255,724 |
LIABILITIES AND EQUITY | | | | | ||
Current liabilities | | | | | ||
Accounts payable | | | $303,651 | | | $4,768 |
Accounts payable to related party | | | 7,937 | | | 2,349 |
Accrued liabilities and other liabilities | | | 105,034 | | | 65,249 |
Deferred revenue | | | 9,653 | | | 11,982 |
Current portion of long-term debt | | | 19,046 | | | 26,776 |
Current portion of long-term debt - related party | | | 7,096 | | | 7,153 |
Current portion of operating lease liabilities | | | 30,215 | | | 22,021 |
Current portion of finance lease liabilities | | | 21,903 | | | 36,269 |
Current portion of finance lease liabilities - related party | | | 15,627 | | | 15,608 |
Total current liabilities | | | 520,162 | | | 192,175 |
Derivative liabilities | | | 2,999 | | | 5,880 |
Long-term debt, net | | | 214,369 | | | 235,648 |
Long-term debt, net - related party | | | 191,217 | | | 420,040 |
Operating lease liabilities | | | 77,936 | | | 93,462 |
Finance lease liabilities | | | 229,755 | | | 255,609 |
Finance lease liabilities - related party | | | 210,992 | | | 227,609 |
Asset retirement obligations | | | 34,929 | | | 33,499 |
Other long-term liabilities | | | 14,451 | | | 20,641 |
Total liabilities | | | 1,496,810 | | | 1,484,563 |
Commitments and contingencies (Note 19) | | | | | ||
Equity interest | | | 1,135,769 | | | 902,099 |
Related party note receivable | | | (6,759) | | | — |
Accumulated other comprehensive loss | | | (9,178) | | | (14,961) |
Non-controlling interest | | | 14,376 | | | 11,341 |
Non-controlling interest – ENE Onshore | | | (130,282) | | | (127,318) |
Total equity | | | 1,003,926 | | | 771,161 |
Total liabilities and equity | | | $2,500,736 | | | $2,255,724 |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Revenues | | | | | ||
FSRU and terminal services | | | $468,030 | | | $ 430,843 |
Gas sales | | | 420,525 | | | — |
Total revenues | | | 888,555 | | | 430,843 |
Operating expenses | | | | | ||
Cost of revenue and vessel operating expenses | | | 192,723 | | | 150,478 |
Direct cost of gas sales | | | 390,518 | | | — |
Depreciation and amortization | | | 104,908 | | | 104,167 |
Selling, general and administrative expenses | | | 47,088 | | | 42,942 |
Restructuring, transition and transaction expenses | | | 13,974 | | | — |
Total operating expenses | | | 749,211 | | | 297,587 |
Operating income | | | 139,344 | | | 133,256 |
Other income (expense) | | | | | ||
Interest expense | | | (31,892) | | | (37,460) |
Interest expense- related party | | | (48,922) | | | (51,970) |
Earnings from equity method investment | | | 3,263 | | | 3,094 |
Other income (expense), net | | | 564 | | | (92) |
Income before income taxes | | | 62,357 | | | 46,828 |
Provision for income taxes | | | (21,168) | | | (13,937) |
Net income | | | 41,189 | | | 32,891 |
Less net income attributable to non-controlling interest | | | 3,035 | | | 2,622 |
Less net loss attributable to non-controlling interest – ENE Onshore | | | (2,964) | | | (8,484) |
Net income attributable to partners | | | $41,118 | | | $38,753 |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Net income | | | $41,189 | | | $32,891 |
Other comprehensive income (loss) | | | | | ||
Share of comprehensive income (loss) of equity method investee | | | 2,458 | | | (2,247) |
Change in unrealized gains (losses) on cash flow hedges | | | 3,325 | | | (3,186) |
Comprehensive income | | | 46,972 | | | 27,458 |
Less comprehensive income attributable to non-controlling interest | | | 3,035 | | | 2,622 |
Less comprehensive loss attributable to non-controlling interest – ENE Onshore | | | (2,964) | | | (8,484) |
Comprehensive income attributable to partners | | | $46,901 | | | $33,320 |
| | Equity interest | | | Related party note receivable | | | Accumulated other comprehensive loss | | | Non- controlling interest | | | Non- controlling interest- ENE Onshore | | | Total equity | |
| | (in thousands) | | |||||||||||||||
Balance at December 31, 2019 | | | $863,750 | | | — | | | $(9,528) | | | $9,905 | | | $(118,834) | | | $745,293 |
Net income (loss) | | | 38,753 | | | — | | | — | | | 2,622 | | | (8,484) | | | 32,891 |
Other comprehensive loss | | | — | | | — | | | (5,433) | | | — | | | — | | | (5,433) |
Contribution | | | 6,000 | | | — | | | — | | | — | | | — | | | 6,000 |
Distributions | | | (6,404) | | | — | | | — | | | (1,186) | | | — | | | (7,590) |
Balance at December 31, 2020 | | | $902,099 | | | — | | | $(14,961) | | | $11,341 | | | $(127,318) | | | $771,161 |
Net income (loss) | | | 41,118 | | | — | | | — | | | 3,035 | | | (2,964) | | | 41,189 |
Related party note receivable | | | — | | | (6,759) | | | — | | | — | | | — | | | (6,759) |
Other comprehensive income | | | — | | | — | | | 5,783 | | | — | | | — | | | 5,783 |
Contributions | | | 192,552 | | | — | | | — | | | — | | | — | | | 192,552 |
Balance at December 31, 2021 | | | $1,135,769 | | | $(6,759) | | | $(9,178) | | | $14,376 | | | $(130,282) | | | $1,003,926 |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Cash flows from operating activities | | | | | ||
Net income | | | $41,189 | | | $32,891 |
Adjustments to reconcile net income to net cash from operating activities: | | | | | ||
Depreciation and amortization | | | 104,908 | | | 104,167 |
Amortization of operating lease right-of-use assets | | | 23,496 | | | 12,381 |
Accretion expense | | | 1,430 | | | 1,370 |
Amortization of debt issuance costs | | | 1,394 | | | 1,827 |
Share of net earnings in equity method investee | | | (3,263) | | | (3,094) |
Changes in operating assets and liabilities: | | | | | ||
Accounts receivable | | | (247,174) | | | (2,453) |
Inventories | | | (82,667) | | | (17,114) |
Other current assets and other assets | | | (18,758) | | | (18,871) |
Accounts payable and accrued liabilities | | | 341,339 | | | 7,318 |
Derivative liabilities | | | 445 | | | (602) |
Deferred revenue - current | | | (2,329) | | | 2,050 |
Net investments in sales-type leases | | | 10,229 | | | 8,777 |
Operating lease assets and liabilities | | | (22,436) | | | (11,912) |
Other long-term liabilities | | | (6,190) | | | (7,771) |
Net cash provided by operating activities | | | $141,613 | | | $108,964 |
| | | | |||
Cash flows from investing activities | | | | | ||
Purchases of property and equipment | | | $(36,091) | | | $(41,258) |
Net cash used in investing activities | | | $(36,091) | | | $(41,258) |
| | | | |||
Cash flows from financing activities | | | | | ||
Proceeds from long-term debt - related party | | | $118,309 | | | $62,750 |
Repayments of long-term debt - related party | | | (82,153) | | | (16,280) |
Repayments of long-term debt | | | (29,214) | | | (27,617) |
Related party note receivables | | | (200,500) | | | — |
Collections of related party note receivables | | | 122,338 | | | — |
Payment of debt issuance costs | | | (1,188) | | | — |
Principal payments under finance lease liabilities | | | (36,262) | | | (34,143) |
Principal payments under finance lease liabilities - related party | | | (15,427) | | | (14,558) |
Contribution | | | — | | | 6,000 |
Distributions | | | — | | | (7,590) |
Net cash used in financing activities | | | $(124,097) | | | $(31,438) |
Net increase (decrease) in cash, cash equivalents and restricted cash | | | $(18,575) | | | $36,268 |
Cash, cash equivalents and restricted cash | | | | | ||
Beginning of year | | | $109,539 | | | $73,271 |
End of year | | | $90,964 | | | $109,539 |
General business information |
2. | Summary of significant accounting policies |
Vessels | | | 30 years |
Vessel related equipment | | | 5-30 years |
Buoy and pipeline | | | 20 years |
Finance lease right-of-use assets | | | Lesser of useful life or lease team |
Other equipment | | | 3-7 years |
3. | Fair value of financial instruments |
| | | | As of December 31, | |||||
| | | | 2021 | | | 2020 | ||
Financial liabilities | | | | | | | |||
Derivative financial instruments | | | Level 2 | | | $4,400 | | | $7,506 |
4. | Accounts receivable, net |
| | 2021 | | | 2020 | |
Trade receivables | | | $245,000 | | | $ 14,242 |
Accrued revenue | | | 16,414 | | | 5,161 |
Allowance for doubtful accounts | | | (879) | | | (879) |
Accounts receivable, net | | | $260,535 | | | $18,524 |
5. | Derivative financial instruments |
| | December 31, 2021 | |
Interest rate swap(1) | | | $70,319 |
(1) | Number of open positions and gross notional values do not measure the Company’s risk of loss, quantify risk or represent assets or liabilities of the Company, but rather indicate the relative size of the derivative instruments and are used in the calculation of the amounts to be exchanged between counterparties upon settlements. |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Current liabilities | | | | | ||
Interest rate swaps - cash flow hedges | | | $1,401 | | | $1,626 |
Noncurrent liabilities | | | | | ||
Interest rate swaps - cash flow hedges | | | 2,999 | | | 5,880 |
Derivative liabilities | | | $4,400 | | | $7,506 |
• | In 2018, the Company entered into two long-term interest rate swap agreements with a major financial institution. The swaps, which became effective in October 2018 and expire in April 2030, are used to hedge approximately 70% of the variability in interest payments/interest risk on the loans bank loans dated June 23, 2017. |
Derivatives Designated in Cash Flow Hedging Relationship | | | Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives | | | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | | | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | ||||||
| | 2021 | | | 2020 | | | | | 2021 | | | 2020 | ||
Interest Rate Swaps | | | $2,209 | | | $ (4,837) | | | Interest expense | | | $(1,116) | | | ($ 1,651) |
6. | Inventories |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
LNG | | | $101,594 | | | $ 17,883 |
Bunker fuel | | | 3,426 | | | 4,471 |
Inventories | | | $105,020 | | | $22,354 |
7. | Other current assets |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Prepaid expenses | | | $10,259 | | | $5,557 |
Prepaid expenses - related party | | | 5,917 | | | 6,877 |
Tax receivables | | | 9,186 | | | 4,230 |
Other receivables | | | 832 | | | 1,329 |
Other current assets | | | $26,194 | | | $17,993 |
8. | Property and equipment |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Vessels | | | $1,705,719 | | | $1,683,989 |
Vessel related equipment | | | 391,985 | | | 424,485 |
Buoy and pipeline | | | 11,553 | | | 11,806 |
Finance lease right-of-use assets | | | 219,435 | | | 383,892 |
Other equipment | | | 16,068 | | | 24,462 |
Assets in progress | | | 21,023 | | | 21,936 |
Less accumulated depreciation | | | (932,614) | | | (1,049,042) |
Property and equipment, net | | | $1,433,169 | | | $1,501,528 |
9. | Accrued liabilities |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Accrued vessel and cargo expenses | | | $48,053 | | | $ 30,771 |
Payroll and related liabilities | | | 9,262 | | | 9,343 |
Accrued interest | | | 917 | | | 2,275 |
Current portion of derivative liability | | | 1,401 | | | 1,626 |
Off-market capacity liability – ENE Onshore | | | 11,072 | | | 14,103 |
Accrued turnover taxes | | | 25,016 | | | 239 |
Other accrued liabilities | | | 9,313 | | | 6,892 |
Accrued liabilities | | | $105,034 | | | $ 65,249 |
10. | Long-term debt |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Experience Vessel Financing | | | $148,500 | | | $ 168,300 |
2017 Bank Loans | | | 91,570 | | | 100,984 |
Total debt | | | 240,070 | | | 269,284 |
Less unamortized debt issuance costs | | | (6,655) | | | (6,860) |
Total debt, net | | | 233,415 | | | 262,424 |
Less current portion | | | (19,046) | | | (26,776) |
Total long-term debt | | | $214,369 | | | $ 235,648 |
2022 | | | $20,304 |
2023 | | | 22,002 |
2024 | | | 22,693 |
2025 | | | 23,435 |
2026 | | | 24,239 |
Thereafter | | | 127,397 |
Total debt, net | | | $240,070 |
11. | Long-term debt – related party |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Exquisite Vessel Financing | | | $196,213 | | | $ 203,996 |
KFMC-ENE Onshore Note | | | 2,100 | | | — |
ENE Lateral Facility | | | — | | | 223,197 |
Total related party debt | | | 198,313 | | | 427,193 |
Less current portion | | | (7,096) | | | (7,153) |
Long-term related party debt | | | $191,217 | | | $ 420,040 |
2022 | | | $7,096 |
2023 | | | 10,445 |
2024 | | | 9,078 |
2025 | | | 9,741 |
2026 | | | 10,521 |
Thereafter | | | 91,432 |
Total payments | | | 138,313 |
Residual value for Exquisite vessel financing | | | 60,000 |
Total debt - related party | | | $198,313 |
12. | Other long-term liabilities |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Deferred revenue | | | $14,451 | | | $9,569 |
Off-market capacity liability – ENE Onshore | | | — | | | 11,072 |
Other long-term liabilities | | | $14,451 | | | $20,641 |
13. | Leases |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
External leases: | | | | | ||
Finance lease liabilities | | | $251,658 | | | $ 291,878 |
Less current portion of finance lease liabilities | | | (21,903) | | | (36,269) |
Finance lease liabilities, long-term | | | $229,755 | | | $255,609 |
| | | | |||
Related party leases: | | | | | ||
Finance lease liabilities | | | $226,619 | | | $ 243,217 |
Less current portion of finance lease liabilities | | | (15,627) | | | (15,608) |
Finance lease liabilities, long-term | | | $210,992 | | | $227,609 |
| | Operating | | | Finance | |
2022 | | | $35,715 | | | $78,069 |
2023 | | | 35,641 | | | 75,399 |
2024 | | | 28,383 | | | 75,412 |
2025 | | | 17,829 | | | 63,999 |
2026 | | | 797 | | | 61,343 |
Thereafter | | | 1,829 | | | 430,554 |
Total lease payments | | | 120,194 | | | 784,776 |
Less: imputed interest | | | (12,043) | | | (306,499) |
Carrying value of lease liabilities | | | 108,151 | | | 478,277 |
Less: current portion | | | (30,215) | | | (37,530) |
Carrying value of long-term lease liabilities | | | $77,936 | | | $440,747 |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
Amortization of finance lease right-of-use assets - related party | | | $4,906 | | | $4,906 |
Amortization of finance lease right-of-use assets - external | | | 13,345 | | | 13,345 |
Interest on finance lease liabilities - related party | | | 29,080 | | | 30,619 |
Interest on finance lease liabilities - external | | | 17,231 | | | 19,370 |
Operating lease expense | | | 29,489 | | | 16,919 |
Short-term lease expense | | | 746 | | | 681 |
Total lease costs | | | $94,797 | | | $85,840 |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
Cash paid for amounts included in measurement of finance lease liabilities - related party | | | $29,080 | | | $30,619 |
Cash paid for amounts included in measurement of finance lease liabilities - external | | | 17,231 | | | 19,370 |
Cash paid for amounts included in measurement of operating lease liabilities | | | 22,500 | | | 11,912 |
Financing cash flows related to finance leases - related party | | | 15,608 | | | 14,558 |
Financing cash flows related to finance leases - external | | | 36,269 | | | 34,143 |
Right-of-use assets obtained in exchange for new operating lease liabilities | | | 15,248 | | | 121,575 |
14. | Revenue |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
Revenue from leases | | | $346,261 | | | $331,726 |
Revenue from contracts with customers | | | | | ||
Time charter, regasification and other services | | | 121,769 | | | 99,117 |
Gas sales | | | 420,525 | | | — |
Total revenue | | | $888,555 | | | $430,843 |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
Operating lease income | | | $268,815 | | | $ 252,651 |
Sales-type lease income | | | 77,446 | | | 79,075 |
Total revenue from leases | | | $346,261 | | | $331,726 |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
Property and equipment | | | $1,899,892 | | | $1,891,202 |
Accumulated depreciation | | | (766,642) | | | (686,599) |
Property and equipment, net | | | $1,133,250 | | | $1,204,603 |
| | Sales-type | | | Operating | |
2022 | | | $87,612 | | | $208,030 |
2023 | | | 80,449 | | | 167,190 |
2024 | | | 84,214 | | | 132,753 |
2025 | | | 87,612 | | | 121,510 |
2026 | | | 87,612 | | | 93,327 |
Thereafter | | | 579,488 | | | 475,428 |
Total undiscounted | | | 1,006,987 | | | $1,198,238 |
Less: imputed interest | | | (581,854) | | | |
Net investment in sales-type leases | | | 425,133 | | | |
Less: current portion | | | (12,225) | | | |
Non-current net investment in sales-type leases | | | $412,908 | | |
| | Year ended December 31, 2021 | ||||||||||
| | Revenue from leases | | | Revenue from contracts with customers | | | Total revenue | ||||
| | TCP, Regas and other | | | Gas sales | | ||||||
Bangladesh | | | $76,779 | | | $39,748 | | | $158,153 | | | $274,680 |
UAE | | | 60,395 | | | 22,152 | | | — | | | 82,547 |
Pakistan | | | 45,025 | | | 9,578 | | | — | | | 54,603 |
Argentina | | | 47,202 | | | 17,599 | | | — | | | 64,801 |
Brazil | | | 50,964 | | | 6,714 | | | 222,878 | | | 280,556 |
Israel | | | 38,080 | | | 6,494 | | | — | | | 44,574 |
US | | | — | | | 2,854 | | | — | | | 2,854 |
China | | | — | | | — | | | 38,950 | | | 38,950 |
Other | | | 27,816 | | | 16,630 | | | 544 | | | 44,990 |
Total revenue | | | $346,261 | | | $121,769 | | | $420,525 | | | $888,555 |
| | Year ended December 31, 2020 | ||||||||||
| | Revenue from leases | | | Revenue from contracts with customers | | | Total revenue | ||||
| | TCP, Regas and other | | | Gas sales | | ||||||
Bangladesh | | | $79,076 | | | $ 38,664 | | | — | | | $117,740 |
UAE | | | 62,857 | | | 19,342 | | | — | | | 82,199 |
Pakistan | | | 43,268 | | | 10,367 | | | — | | | 53,635 |
Argentina | | | 45,063 | | | 6,530 | | | — | | | 51,593 |
Brazil | | | 42,451 | | | 5,850 | | | — | | | 48,301 |
Israel | | | 38,185 | | | 6,637 | | | — | | | 44,822 |
US | | | — | | | — | | | — | | | — |
Other | | | 20,826 | | | 11,727 | | | — | | | 32,553 |
Total revenue | | | $ 331,726 | | | $99,117 | | | — | | | $ 430,843 |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Deferred revenues, beginning of period | | | $9,569 | | | $ 4,755 |
Cash received but not yet recognized | | | 4,882 | | | 4,814 |
Revenue recognized from prior period deferral | | | — | | | — |
Deferred revenues, end of period | | | $14,451 | | | $9,569 |
2022 | | | $45,826 |
2023 | | | 43,558 |
2024 | | | 44,845 |
2025 | | | 44,071 |
2026 | | | 44,071 |
Thereafter | | | 212,595 |
Total Contracted Revenue | | | $434,966 |
15. | Income taxes |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Domestic | | | $(80,658) | | | $(144,412) |
Foreign | | | 143,015 | | | 191,240 |
Total | | | $62,357 | | | $46,828 |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Current: | | | | | ||
Domestic | | | $2,281 | | | $— |
Foreign | | | 19,853 | | | 13,529 |
Total current: | | | 22,134 | | | 13,529 |
Deferred: | | | | | ||
Domestic | | | (27) | | | — |
Foreign | | | (939) | | | 408 |
Total deferred: | | | (966) | | | 408 |
Income Tax Expense | | | $21,168 | | | $13,937 |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Statutory rate applied to pre-tax income: | | | 21.0% | | | 21.0% |
Foreign rate differential | | | (15.6%) | | | (21.1%) |
Foreign exchange differences | | | (2.0%) | | | 0.0% |
Permanent items | | | 3.1% | | | 0.6% |
Withholding taxes | | | 22.9% | | | 28.4% |
Uncertain tax positions | | | 2.8% | | | 0.0% |
Audit settlement | | | 2.4% | | | 0.0% |
Other | | | (0.7%) | | | 0.9% |
Effective Tax Rate | | | 33.9% | | | 29.8% |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Deferred tax assets: | | | | | ||
Fixed assets | | | $33 | | | $— |
Net operating losses | | | 518 | | | 1,058 |
Lease liabilities | | | 40,632 | | | — |
Other | | | 344 | | | — |
Deferred tax assets: | | | 41,527 | | | 1,058 |
Valuation allowances: | | | (496) | | | (1,044) |
Net deferred tax assets | | | $41,031 | | | $14 |
Deferred tax liabilities: | | | | | ||
Right of use assets | | | $39,004 | | | $— |
Unrealized foreign exchange gains | | | 1,088 | | | — |
Misc. Accruals | | | — | | | 14 |
Net deferred tax liabilities: | | | $40,092 | | | $14 |
Net deferred tax asset/(liability) | | | $939 | | | $— |
| | 2021 | | | 2020 | |
Balance at January 1 | | | $— | | | $— |
Increases (decreases) related to prior year tax positions | | | 1,388 | | | — |
Balance at December 31 | | | $ 1,388 | | | $ — |
16. | Related party transactions |
| | For the years ended December 31, | ||||
| | 2021 | | | 2020 | |
Management fees and other expenses with Kaiser | | | $1,814 | | | $2,345 |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Amounts due from related parties | | | $11,140 | | | $ 5,977 |
Amounts due to related parties | | | 7,937 | | | 2,349 |
Prepaid expenses - related party | | | 5,917 | | | 6,877 |
• | Kaiser issued guarantees dated December 1, 2015 in favor of all creditors and obligees of ENE Onshore and ENE Lateral under their third-party contracts. The Kaiser guarantees issued in favor of ENE Lateral and ENE Onshore were terminated on September 17, 2021 in connection with the reorganization. |
• | Kaiser issued a guarantee dated September 11, 2013 (and reaffirmed on December 1, 2015) in favor of Algonquin Gas Transmission, LLC (“AGT”) and Maritimes & Northeast Pipeline, L.L.C. (each a wholly owned subsidiary of Enbridge, Inc.), in respect of all payment obligations owed by ENE Onshore and ENE Lateral (the “AGT Guarantee”). In addition, Kaiser obtained a letter of credit on behalf of ENE Onshore and ENE Lateral (the “AGT LOC”). The amount available for drawing under the AGT LOC reduces monthly and was approximately $16.5 million as of December 31, 2021. In connection with the Northeast Gateway Contribution, EELP agreed to (i) indemnify Kaiser in respect of Kaiser’s obligations related to ENE Lateral under the AGT Guarantee and AGT LOC, (ii) pay an annual fee in the amount of $1.2 million (pro-rated based on the number of days such guarantee remains outstanding in any year (beginning September 17, 2021)) to Kaiser to maintain such AGT Guarantee and (iii) reimburse Kaiser for any fees actually incurred under the AGT LOC. |
• | Kaiser issued an uncapped construction and operational guarantee dated May 14, 2007 in favor of the Secretary of Transportation, United States of America, as represented by the Maritime Administrator (“MARAD”), in respect of Northeast Gateway Energy Bridge, LP’s obligations related to design, construction, operations and decommissioning under the deepwater port license issued by MARAD (the “Kaiser – MARAD Guarantee”). In addition, Kaiser obtained a letter of credit in favor of MARAD to cover decommissioning costs in the amount of approximately $15.4 million (the “Kaiser – MARAD LOC”) , which Kaiser – MARAD LOC was amended and increased to $16.3 million in December 2021. In connection with the Northeast Gateway Contribution, EELP agreed to (i) indemnify Kaiser in respect of Kaiser’s obligations under the Kaiser-MARAD Guarantee and the Kaiser – MARAD LOC, (ii) pay a nominal fee to Kaiser to maintain such Kaiser-MARAD Guarantee and (iii) reimburse Kaiser for any fees actually incurred under the MARAD LOC. |
17. | Defined contribution plan |
18. | Concentration risk |
| | Percentage of Total Revenues | ||||
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Customer A | | | 32% | | | 11% |
Customer B | | | 27% | | | 20% |
Customer C | | | 6% | | | 12% |
Customer D | | | 6% | | | 10% |
Customer E | | | 5% | | | 10% |
Customer F | | | 5% | | | 10% |
19. | Commitments and contingencies |
20. | Asset retirement obligations |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Asset retirement obligations, beginning of period | | | $33,499 | | | $ 32,129 |
Accretion expense | | | 1,430 | | | 1,370 |
Asset retirement obligations, end of period | | | $34,929 | | | $33,499 |
21. | Supplemental noncash disclosures for consolidated statement of cash flows |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Supplemental cash flow information: | | | | | ||
Cash paid for taxes | | | $16,807 | | | $14,328 |
Cash paid for interest | | | 80,501 | | | 88,167 |
Right-of-use assets obtained in exchange for lease obligations | | | 15,248 | | | 121,575 |
Change in capital expenditures included in accounts payable | | | 1,189 | | | 8,445 |
KFMC note receivable netted against Lateral note payable to KFMC | | | 88,500 | | | — |
Noncash contribution received to settle KFMC-ENE Onshore note | | | 118,893 | | | — |
Noncash contribution received to settle note payable to KFMC | | | 57,159 | | | — |
Noncash contribution received reflected as a note Receivable from Kaiser | | | 16,500 | | | — |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Cash and cash equivalents | | | $72,786 | | | $90,240 |
Restricted cash - current | | | 2,495 | | | 2,456 |
Restricted cash - non-current | | | 15,683 | | | 16,843 |
Cash, cash equivalents, and restricted cash | | | $90,964 | | | $109,539 |
22. | Accumulated other comprehensive (income) loss |
| | Cumulative translation adjustment | | | Qualifying cash flow hedges | | | Share of OCI in equity method investee | | | Total | |
At December 31, 2019 | | | $ 2,167 | | | $3,841 | | | $3,520 | | | $9,528 |
Other comprehensive (income) loss | | | — | | | 4,837 | | | (847) | | | 3,990 |
Reclassification to income | | | — | | | (1,651) | | | 3,094 | | | 1,443 |
At December 31, 2020 | | | 2,167 | | | 7,027 | | | 5,767 | | | 14,961 |
Other comprehensive (income) loss | | | — | | | (2,209) | | | (5,721) | | | (7,930) |
Reclassification to income | | | — | | | (1,116) | | | 3,263 | | | 2,147 |
At December 31, 2021 | | | $2,167 | | | $3,702 | | | $3,309 | | | $9,178 |
Item 13. | Other Expenses of Issuance and Distribution. |
SEC Registration Fee | | | $40,936 |
FINRA Filing Fee | | | 66,740 |
Stock Exchange Listing Fee | | | 295,000 |
Printing Costs | | | 200,000 |
Legal Fees and Expenses | | | 2,500,000 |
Accounting Fees and Expenses | | | 4,000,000 |
Transfer Agent Fees and Expenses | | | 20,000 |
Miscellaneous Expenses | | | 2,077,324 |
Total | | | $9,200,000 |
Item 14. | Indemnification of Directors and Officers. |
Item 15. | Recent Sales of Unregistered Securities. |
Item 16. | Exhibits and Financial Statement Schedules. |
Exhibit No. | | | Description of Exhibit |
| | Form of Underwriting Agreement. | |
| | Form of Securities Purchase Agreement, by and between Maya Maritime, LLC and Excelerate Energy Limited Partnership. | |
| | Form of Amended and Restated Certificate of Incorporation of Excelerate Energy, Inc. to be in effect upon completion of this offering. | |
| | Form of Amended and Restated Bylaws of Excelerate Energy, Inc. to be in effect upon completion of this offering. | |
| | Form of Registration Rights Agreement. |
Exhibit No. | | | Description of Exhibit |
| | Form of Stockholder’s Agreement. | |
| | Opinion of Gibson, Dunn & Crutcher LLP. | |
| | Form of Amended and Restated Limited Partnership Agreement of Excelerate Energy Limited Partnership to be in effect upon completion of this offering. | |
| | Form of Tax Receivable Agreement. | |
| | Form of Indemnification Agreement entered into with Directors and Officers. | |
| | Form of Excelerate Energy, Inc. Long-Term Incentive Plan. | |
| | Letter Agreement dated April 3, 2020, by and between Excelerate Energy Limited Partnership and Dana Armstrong. | |
| | Letter Agreement dated October 16, 2020, by and between Excelerate Energy Limited Partnership and Alisa Newman Hood. | |
| | Written Description of the Material Terms of the Excelerate Energy 2021 Short Term Incentive Plan. | |
| | Form of Senior Secured Revolving Credit Agreement, by and between Excelerate Energy Limited Partnership, as Borrower, Excelerate Energy, Inc., as Parent, the lenders party thereto, the issuing banks party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. | |
| | Subsidiaries of the Registrant. | |
| | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm, as to Excelerate Energy, Inc. | |
| | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm, as to EELP, Predecessor. | |
| | Consent of Gibson, Dunn & Crutcher LLP (to be included in Exhibit 5.1). | |
| | Power of Attorney (included on the signature page hereto). | |
| | Consent of Carolyn J. Burke, as director nominee. | |
| | Consent of Paul T. Hanrahan, as director nominee. | |
| | Consent of Henry G. Kleemeier, as director nominee. | |
| | Consent of Don P. Millican, as director nominee. | |
| | Consent of Robert A. Waldo, as director nominee. | |
| | Filing Fee Table. |
# | Previously filed. |
† | Management contract or compensatory plan or arrangement. |
Item 17. | Undertakings. |
(i) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(ii) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| | EXCELERATE ENERGY, INC. | ||||
| | | | |||
| | By: | | | /s/ Steven Kobos | |
| | Name: | | | Steven Kobos | |
| | Title: | | | President and Chief Executive Officer |
* | | | Director and President and Chief Executive Officer (Principal Executive Officer) | | | April 4, 2022 |
Steven Kobos | | |||||
| | | | |||
* | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | | April 4, 2022 |
Dana Armstrong | | |||||
| | | | |||
* | | | Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) | | | April 4, 2022 |
Michael A. Bent | |
*By: | | | /s/ Steven Kobos | | | |
| | Steven Kobos | | | ||
| | As Attorney-in-Fact | | |
![]() |
Gibson, Dunn & Crutcher LLP
200 Park Ave
New York, NY 10166-0193
Tel 212.351.4000
www.gibsondunn.com
|
Re: |
Excelerate Energy, Inc.
Registration Statement on Form S‑1 (File No. 333-262065) |
Security Type
|
Security Class Title
|
Fee Calculation or Carry
Forward Rule
|
Amount Registered
|
Proposed Maximum
Offering Price Per Unit
|
Maximum Aggregate
Offering Price
|
Fee Rate
|
Amount of Registration Fee
|
|
Newly Registered Securities
|
||||||||
Fees to Be Paid
|
Equity
|
Class A common stock
|
457(a)
|
18,400,000
|
$24.00
|
$441,600,000(1)
|
0.0000927
|
$40,936.32
|
Fees Previously Paid
|
Equity
|
Class A common stock
|
457(o)
|
– | – |
$100,000,000(2)
|
0.0000927
|
$9,270.00
|
Total Offering Amounts
|
$441,600,000
|
$40,936.32
|
||||||
Total Fees Previously Paid
|
$9,270.00
|
|||||||
Total Fee Offsets
|
--
|
|||||||
Net Fee Due
|
$31,666,32
|
'0 0V]P>7)I9VAT($AE=VQE='0@
M4&%C:V%R9"P@,C P- !S9C,R !#$0 7?___S)@ !Y0 /V/___[
MH?___:( /; # =?_; $, 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$!
M 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! ?_; $,! 0$!
M 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$! 0$!
M 0$! 0$! 0$! 0$! 0$! ?_ !$( , #/ ,!(@ "$0$#$0'_Q ? !!0$!
M 0$! 0 0(#! 4&!P@)"@O_Q "U$ " 0,# @0#!04$! 7T!
M @, !!$%$B$Q008346$'(G$4,H&1H0@C0K'!%5+1\"0S8G*""0H6%Q@9&B4F
M)R@I*C0U-C 72QE1/+N_D>7]J+]ISO\ M$?&X 9Y/Q3\; #ZZWC
M&/\ ]?6OTOA[PXQ/$&68;,H8ZA1AB')*G*G.[JE*2T_2_2UO#7$Z?_ "X:?;F7==;:ZM;?Y'^O
M!_:-E_S\0?DW_P 31_:-E_S\0?DW_P 37^1!_P -1_M+_P#1Q7QJ_P##H^-/
M_EY1_P -1_M+_P#1Q7QJ_P##H^-/_EY5?\0:Q7_0WPO3_EU/^[_?^_\ [>'_
M *S?].7T^VO+R]/N]+_Z[QU&W_@EB8=R"P&?3[OIBD_M*)SMBDC9B< !9& V
M<2*SX6-6#< ,ZD?W6(VU_D-R_M/?M+N5D/[1?QM 'R_+\4_&@4XSP1_;AR?F
M_EZ5^V/_ ;[?'7XU>-?^"F_PT\.^-?B_P#$WQEX
MGM;="#("@* .A P ![ <>^!3J**\!*RM\[]7Z
MGJ_U;MY(****8!1110 5_")_P=@?\G5?LM?]D&\4?^I_J]?W=U_")_P=@?\
M)U7[+7_9!O%'_J?ZO7WWAI_R5N7_ /;_ .1X/$?_ "+9_P#7RE_Z7$^R/^#3
M8 _"3]KP'_HI?@3_ -1[6:]2_P""_)HT:LJ=2ER2K4X5(QBK2E=333VT;5T]5J:\4*7UG#14I*$J4G.*
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M>A-TZD9*S4HZ/3IK^)^A4:M.O3C6I24Z=1
@:K8:Q81:Q\1->UG2IKK2[N.[C@U72=4N+JPU+
M3[B2(17-E>126UY;.\\F::ZN"5DBB@^._^"/W_
M 2.\"_\$Y?AG#XB\8QZ-XS_ &G/B#8V4GQ&\>6Z07-KX5AD6&8> _!5W/!'
M=1^'K*^+Q7NJ*%NM;U"WCGDCAM##;P?MXL2(05!!"[