Equity method investments

9 Months Ended

Sep. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

10. Equity method investments

Changes in the balance of the Company’s equity method investments is as follows:


	September 30, 2023
Equity method investments as of December 31, 2022	$	392,306

Dividends	(5,830)
Equity in earnings of investees	12,738

Sale of equity method investments	(260,156)

Equity method investments as of September 30, 2023	$	139,058

The carrying amounts of the Company's equity method investments as of September 30, 2023 and December 31, 2022 are:


	September 30, 2023		December 31, 2022
Hilli LLC	$	—	$	260,000
Energos	139,058		132,306
Total	$	139,058	$	392,306

As of September 30, 2023, the carrying value of the Company’s equity method investment was less than its proportionate share of the underlying net assets of its investee by $1,548. At December 31, 2022, the carrying value of the Company’s equity method investments exceeded its proportionate share of the underlying net assets of its investees by $16,976, and the basis difference attributable to amortizable net assets was amortized to Income (loss) from equity method investments in the condensed consolidated statements of operations and comprehensive income (loss) over the remaining estimated useful lives of the underlying assets.

Hilli LLC

On March 15, 2023, the Company completed a transaction with Golar LNG Limited ("GLNG") for the sale of the Company's investment in the common units of Hilli LLC in exchange for approximately 4.1 million NFE shares and $100,000 in cash (the "Hilli Exchange"). In the fourth quarter of 2022, the Company recognized an other-than-temporary impairment on the investment in Hilli LLC of $118,558; this impairment was recognized in Income (loss) from equity method investments in the consolidated statements of operations and comprehensive income (loss). Upon completion of the Hilli Exchange, a loss on disposal of $37,401 was recognized in Other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss). As a result of the Hilli Exchange, the Company no longer has an ownership interest in the Hilli. NFE shares received from GLNG were cancelled upon closing of the Hilli Exchange.

The Company had guaranteed 50% of the outstanding principal and interest amounts payable by Hilli Corp., a direct subsidiary of Hilli LLC. The Company had also guaranteed letters of credit issued by a financial institution in the event of Hilli Corp.’s underperformance or non-performance under the liquefaction tolling agreement with its customer. In conjunction with the Hilli Exchange, the Company is no longer a guarantor under these arrangements, and the remaining guarantee liability of $2,286 was derecognized as a reduction to Selling, general and administrative in the condensed consolidated statements of operations in the first quarter of 2023.

Energos

In August 2022, the Company completed a transaction (the “Energos Formation Transaction”) with an affiliate of Apollo Global Management, Inc., pursuant to which the Company transferred ownership of 11 vessel to Energos Infrastructure ("Energos") in exchange for approximately $1.85 billion in cash and a 20% equity interest in Energos. The Company's equity investment provides certain rights, including representation on the board of directors, which give the Company significant influence over the operations of Energos, and as such, the investment has been accounted for under the equity method; this investment is included within the Ships segment. Energos is also an affiliate, and all transactions with Energos are transactions with an affiliate.

Due to the timing and availability of financial information of Energos, the Company recognizes its proportional share of the income or loss from the equity method investment on a financial reporting lag of one fiscal quarter. For the three and nine months ended September 30, 2023, the Company has recognized earnings from Energos of $489 and $6,752.