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Investments | 9 Months Ended
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Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract] |
Investments | Investments Investments in equity securities We measure certain of our investments in equity securities at fair value on a recurring basis. Furthermore, we categorize these investments in equity securities according to the fair value hierarchy as defined in Note 2, “Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2020. Mark-to-market fair value adjustments in these investments in equity securities are classified as unrealized loss (gain) on investments in equity securities in our condensed consolidated statements of income and comprehensive income. For certain other investments in equity securities that are not measured at fair value on a recurring basis, we measure such investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. For additional information, see Note 6, “Investments” in our Annual report on form 10-K for the year ended December 31, 2020. The following table summarizes the components of our investments in equity securities:
| Investment in Equity Securities, Level 1 (1) |  | Investment in Equity Securities, Level 2 (1) |  | Investments in Equity Securities, All Others (3) |  | Equity Method Investments (4) (6) |  | Investments Total
Balance at December 31, 2020 | $ | 53.8 |  |  | $ | 4.1 |  |  | $ | 15.7 |  |  | $ | 5.3 |  |  | $ | 78.9 |
New investments (2) (5) (6) | — |  |  | — |  |  | 45.0 |  |  | 58.2 |  |  | 103.2 |
Reclassification from investment in equity securities to equity method investment (6) | — |  |  | — |  |  | (36.4) |  |  | 36.4 |  |  | — |
(Decrease) increase in fair value of investments in equity securities | (25.8) |  |  | 6.3 |  |  | 20.7 |  |  | — |  |  | 1.2 |
Equity in earnings | — |  |  | — |  |  | — |  |  | 0.1 |  |  | 0.1 |
Foreign currency translation (losses) gains | (2.3) |  |  | — |  |  | 0.3 |  |  | (1.6) |  |  | (3.6) |
Balance at September 30, 2021 | $ | 25.7 |  |  | $ | 10.4 |  |  | $ | 45.3 |  |  | $ | 98.4 |  |  | $ | 179.8 |
_______________ (1)Our investment in McPhy (Euronext Paris: MCPHY - ISIN; FR001742329) represents a Level 1 investment while our investment in Stabilis Energy, Inc. represents a Level 2 investment. For the three and nine months ended September 30, 2021, we recognized an unrealized loss of $6.0 and $25.8, respectively, in our Level 1 investment and an unrealized loss of $4.3 and unrealized gain of $6.3, respectively, in our Level 2 investment. (2)During the second quarter 2021, we completed an investment in Earthly Labs Inc. (“Earthly Labs”) in the amount of $5.0 for approximately 15% of its equity. Earthly Labs is the leading provider of small-scale carbon capture systems offering an affordable, small footprint technology platform called “CiCi ®” to capture, recycle, reuse, track and sell CO2. Earthly Labs proprietary approach includes hardware, software and services to address half of all existing carbon dioxide emissions from industrial sources while converting molecules to value. During the first quarter 2021, we completed an investment in Transform Materials LLC (“Transform Materials”) in the amount of $25.0 for approximately 5% of its equity. Transform Materials is a sustainable chemical technology company that uses microwave plasma to convert natural gas into acetylene and hydrogen. Its highly selective, cost-effective, net-carbon-negative process converts the methane in natural gas into high-value products suitable for direct use or downstream reactions. Also, during the first quarter 2021, we completed an investment in Svante Inc. (“Svante”) in the amount of $15.0 for under 10% of its capital stock on a fully diluted basis. Svante offers companies in emissions-intensive industries a commercially viable way to capture large-scale CO2 emissions from existing infrastructure, either for safe storage or to be recycled for further industrial use in a closed loop. (3)Our investments in Svante, Transform Materials and Earthly Labs are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. (4)Our equity investments accounted for under the equity method of accounting include a 50% ownership interest in a joint venture with Hudson Products de Mexico S.A. de CV which totaled $3.0 and $2.8 at September 30, 2021 and December 31, 2020, respectively. This investment is operated and managed by our joint venture partner and as such, we do not have control over the joint venture and therefore it is not consolidated. Additionally, we have a 25% ownership interest in Liberty LNG, which was valued at $2.4 a nd $2.1 at September 30, 2021 and December 31, 2020, respectively. (5)During the second quarter 2021 on May 19, 2021, we completed an investment in Cryomotive GmbH (“Cryomotive”) in the amount of 6.5 million euros (equivalent to $7.9) for a 24.9% ownership interest. Our equity method investment in Cryomotive was $7.2 at September 30, 2021. Cryomotive is a leading green-tech mobility startup in Germany developing a disruptive clean hydrogen storage and refueling technology platform focused on compressed cold hydrogen and cryogenic high-pressure storage. Cryomotive’s proprietary CcH2 CRYOGAS technology aims to decarbonize long-haul commercial vehicles while keeping the range and fueling times similar to diesel powered vehicles. (6)During the fourth quarter 2020, we completed an investment in HTEC Hydrogen Technology & Energy Corporation (“HTEC”) in the amount of CAD 20 million ($15.7 million) in exchange for 15.6% of HTEC’s common stock on a fully-diluted basis. On September 7, 2021 (the “Closing Date”), we completed an additional investment in HTEC in the amount of CAD 63.3 million (equivalent to $50.3) (the “New Investment”), which increased our investment ownership to 25% of HTEC’s common stock on a fully-diluted basis. As such, HTEC is now classified as an equity method investment. We recognized a gain of $20.7 upon remeasurement of the initial HTEC investment due to an observable price change in an orderly transaction for similar instruments of the same issuer, which is recognized in unrealized (gain) loss on investments in equity securities in the condensed consolidated statements of income for the three and nine months ended September 30, 2021. Co-Investment Agreement Simultaneously with the consummation of the New Investment, certain affiliated funds managed by I Squared Capital (collectively, “ISQ”), an infrastructure-focused private equity firm, also purchased a portion of HTEC’s common stock from both HTEC and certain HTEC shareholders (other than Chart) such that the aggregate number of shares of HTEC common stock held by ISQ represents 35% of HTEC’s common stock on a fully-diluted basis (the “ISQ Investment” and, together with the New Investment, the “Investments”). The ISQ Investment was completed at the same purchase price of CAD $24.33 per share (i.e., approximately CAD $153 million in the aggregate). In connection with the Investments, Chart and ISQ entered into a Co-Investment Agreement, dated as of the Closing Date (the “Co-Investment Agreement”), pursuant to which Chart and ISQ have agreed to the following (among other things, and assuming the consummation of the Investments): •In the following circumstances, ISQ shall have the right to sell to Chart all (and not less than all) of the shares of HTEC common stock acquired as part of the ISQ Investment and which are still held by ISQ at such time (the “Put Option”): (i) the third anniversary of the Closing Date, (ii) the date Chart undergoes a change of control (subject to certain exceptions), (iii) the date upon which Chart, during the period from the Closing Date through the third anniversary of the Closing Date, has made certain distributions to its shareholders (including cash or other dividends, or via a spin-off transaction), in excess of $900 million, (iv) the date, if any, upon which our leverage ratio exceeds certain thresholds, and (v) the date, if any, of a bankruptcy event (including certain insolvency-related actions) involving Chart. In the event of such a bankruptcy event, ISQ shall also have certain rights to be paid cash liquidated damages by Chart in lieu of ISQ exercising the Put Option, which shall be calculated as the difference between the ISQ Put Option Consideration (as defined below) and the then fair market value of the HTEC common stock (in the event such fair market value is less than the ISQ Put Option Consideration) then held by ISQ. •In the event that ISQ exercises its Put Option, we shall pay to ISQ an amount in cash (subject to a pro rata reduction in the event the Put Option is exercised prior to the third anniversary of the Closing Date) in exchange for the HTEC common stock then held by ISQ such that ISQ shall realize the greater of (i) an internal rate of return of 10% and (ii) a multiple on ISQ’s invested capital of 1.65x, in each case with respect to each share of HTEC common stock which is subject to the Put Option (the “ISQ Put Option Consideration”); provided, however, that in certain circumstances, we shall be permitted to pay all or some of such amount in the form of shares of our publicly traded common stock (up to 7% of our issued and outstanding common stock on a fully diluted basis following the payment of the ISQ Put Option Consideration with such shares). •Conversely, at any time from and after the third anniversary of the Closing Date, we shall have the right to purchase from ISQ up to 20% of the shares of HTEC common stock acquired as part of the ISQ Investment and which are still held by ISQ at such time (the “Call Option”). In the event that we exercise our Call Option, we shall pay to ISQ an amount in cash in exchange for such common stock such that ISQ shall realize the greater of (i) an internal rate of return of 12.5% and (ii) a multiple on ISQ’s invested capital of 1.65x, in each case with respect to each share of HTEC common stock which is subject to the Call Option. •In addition, we shall have (i) a right of first offer with respect to any shares of HTEC common stock acquired as part of the ISQ Investment that ISQ desires to transfer to any third party and (ii) a right of first refusal with respect to any such shares that ISQ has determined to sell to a third party pursuant to a definitive agreement therewith (provided that the purchase consideration paid by Chart to ISQ upon our exercise of such right of first refusal must be equal to 102% of the purchase consideration agreed to be paid by such third party). •In certain circumstances and subject to other requirements set forth in HTEC’s organizational documents and shareholder agreement, (i) following the 18-month anniversary of the Closing Date, to the extent requested by ISQ, we shall be required to consent to HTEC’s pursuit of an initial public offering (so long as the expected fair market value of the HTEC common stock at such time exceeds 3.5x the per share price set forth above for the Investments), and (ii) following the seven-year anniversary of the Closing Date, to the extent requested by ISQ, we shall be required to consent to a sale process (or similar process related to a liquidity event) of HTEC, and Chart shall be subject to certain customary drag-along rights with respect thereto. The Co-Investment Agreement shall terminate automatically upon the consummation of an initial public offering by HTEC of its common stock.

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