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Impairment Of Long Lived Assets
12 Months Ended
Dec. 31, 2014
Impairment Of Long Lived Assets [Abstract]  
Impairment Of Long Lived Assets

 

NOTE H - Impairment Of Long lived Assets

 

We review long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to the future net undiscounted cash flows expected to be generated by the asset or asset group. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.  Additionally, assets to be disposed of are reported at the lower of the carrying amount or the fair value less estimated costs to sell.

 

During 2014, we renewed our contract with TEC based on a lower rate, which triggered the testing of the related customer intangible assets for impairment.  We evaluated the undiscounted cash flows directly associated with the TEC contract and concluded that no such impairment existed at December 31, 2014.

 

As a result of perusing strategic alternatives, during the fourth quarter of 2014, we committed to a plan to sell one Tanker vessel,  three Handysize vessels and one Tug-Barge unit which was inactive.  As such, we conducted a fair value assessment of the assets.  The fair value was based on indicated valuation evidence from prospective buyers in the market.  As a result, we recorded impairment charges (vessels, property and other equipment) of approximately $38.2 million. 

 

An impairment of approximately $28.3 million was related to three Handysize vessels included in the Dry Bulk Carrier segment which was based on a fair value less cost to sell of approximately $49.2 million less a total carrying value of approximately $77.5 million. The three Handysize vessels are all similar in nature so the same fair value was assigned to each of the vessels, which was based off of the actual sale price of one of the three of the vessels which was sold in March 2015. These assets were classified as held for sale at December 31, 2014. 

 

An impairment of approximately $6.6 million was related to the inactive Tug-Barge unit in the Jones Act segment which was based on a fair value less cost to sell of approximately $6.4 million less a total carrying value of approximately $13.0 million.  The fair value of this unit was based off of a memorandum of agreement that is in place for the sale of this asset.

 

Additionally, an impairment of approximately $3.3 million was related to the Tanker vessel in the Specialty segment which was based on a fair value less cost to sell of approximately $1.5 million less a total carrying value of approximately $4.8 million.  The Tanker vessel was sold during the fourth quarter of 2014.  

 

During 2014, the Company early adopted ASU 2014-8 which changed the definition of discontinued operations.  In accordance with this guidance, we determined that the assets held for sale, as mentioned above, did not represent a strategic shift that would have a major effect on our operations and financial results.  As such, the financial results related to these assets were not reported as discontinued operations.