Property and Equipment

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

As of September 30, 2022 and December 31, 2021, the Company’s property and equipment, net consisted of the following (in thousands):


	September 30, 2022			December 31, 2021
Vessels	$	1,806,704		$	1,705,719
Vessel related equipment		400,279			391,985
Buoy and pipeline		12,383			11,553
Finance lease right-of-use assets		40,007			219,435
Other equipment		16,556			16,068
Assets in progress		33,388			21,023
Less accumulated depreciation		(891,747	)		(932,614	)
Property and equipment, net	$	1,417,570		$	1,433,169

Depreciation expense for the three months ended September 30, 2022 and 2021 was $23.9 million and $25.8 million, respectively. For the nine months ended September 30, 2022 and 2021, depreciation expense was $70.6 million and $77.2 million, respectively.

Vessel Acquisition

As part of the IPO Transaction, in exchange for (i) 7,854,167 shares of Class A Common Stock with a fair market value (based on the IPO price) of $188.5 million, (ii) a cash payment of $50.0 million and (iii) $21.5 million of estimated future payments under the TRA, EELP purchased from Maya Maritime LLC, a wholly owned subsidiary of the Foundation, all of the issued and outstanding membership interests in the Foundation Vessels. The acquisition of both the Excelsior and the Excellence vessels were accounted for as asset acquisitions in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”). In accordance with ASC 805, the accumulated cost of the vessel acquisitions, including Class A Common Stock and contingent consideration related to the TRA, were allocated to the assets acquired based on relative fair value. In 2018, EELP entered into an agreement with a customer to lease the Excellence vessel with the vessel transferring ownership to the customer at the conclusion of the agreement for no additional consideration. Historically, EELP, as a lessor, has accounted for the Excellence vessel contract with our customer as a sales-type lease in the consolidated balance sheet in accordance with Accounting Standards Codification 842, Leases (“ASC 842”). The Excellence vessel will continue to be accounted for as a sales-type lease and thus will not result in an adjustment to property and equipment. The difference between the consideration given to acquire the Excellence vessel and the historical finance lease liability resulted in a $21.8 million early extinguishment of lease liability loss on our consolidated statements of income.