Assets Held For Sale

9 Months Ended

Sep. 30, 2015

Assets Held For Sale [Abstract]

Assets Held For Sale

NOTE 8 – ASSETS HELD FOR SALE

As a result of continued evaluation of our strategic alternatives, during the fourth quarter of 2014, we devised a plan to sell three Handysize vessels and one inactive Jones Act Tug/Barge unit.  Upon approval of this plan, we classified the Handysize vessels and their related equipment as long term assets held for sale, valued at approximately $48.7 million at December 31, 2014.  The Tug/Barge unit and inventory related to the Handysize vessels were classified as short term assets held for sale, and were valued at approximately $7.0 million at December 31, 2014.

During 2014, the Company adopted ASU 2014-08 which changed the definition of discontinued operations.  In accordance with this guidance, we determined that the assets held for sale did not represent a strategic shift that would have a major effect on our operations and financial results.  As such, we did not report the financial results related to these assets as discontinued operations.

During the first quarter of 2015, we sold one of the Handysize vessels and its equipment and paid off related debt.  For additional information related to the sale of this vessel, see Note 4 – Gain on Sale of Assets.

At June 30, 2015, we reclassified the remaining two Handysize vessels and their related equipment and inventory from assets held for sale to assets held in use (vessels, property, and other equipment) and recorded an impairment loss of approximately $1.8 million to adjust the vessels to current fair market value.  As a result of the held for sale classification, there was no depreciation expense related to these assets during the first half of 2015.

During the third quarter of 2015, we recorded an additional impairment loss of approximately $1.1 million on our Jones Act Tug/Barge unit, which is included in current assets held for sale – refer to Note 3 – Impairment Loss. Our November 2015 debt amendments require us to apply any future proceeds from this sale to payments toward one of our credit facilities.  While we continue to actively market this unit, it is classified as held for sale; therefore, there was no depreciation expense related to this vessel during the nine months ended September 30, 2015.

In October of 2015, our Board of Directors approved a Strategic Plan that requires the divestiture of certain non-core assets, which includes the Jones Act Tug/Barge unit and the two Handysize vessels discussed above. For more information regarding the Strategic Plan, see Note 21 – Subsequent Events.