Commitments And Contingencies

3 Months Ended

Mar. 31, 2016

Commitments And Contingencies [Abstract]

Commitments And Contingencies

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Commitments

As of March 31, 2016, twenty-one vessels that we own or operate were committed under various contracts extending beyond 2016 and expiring at various dates through 2020. Certain of these agreements also contain options to extend the contracts beyond their minimum terms.

The State of Louisiana has agreed to pay us $10.3 million in connection with relocating our corporate headquarters to New Orleans.  Of this amount, as of March 31, 2016, we had received $6.5 million, which has offset costs related to construction of our office building as well as other relocation expenses. In accordance with the terms of the incentive agreement, we must employ Louisiana-based personnel meeting certain salary requirements from 2016 through 2030. In the event that we default, we could be required to re-pay up to the total of any cash we received from this incentive. As of March 31, 2016, we expect that we will meet these requirements for the year ended December 31, 2016 and thereafter.

During the third quarter of 2014, we were notified of the bankruptcy of a ship builder that had agreed to build a new handysize dry bulk carrier. Upon notification of the bankruptcy, we reclassified our deposit of $3.9 million from construction in progress to accounts receivable, and we recorded an additional $0.3 million of interest income. During the first quarter of 2015, we collected $4.2 million, which represented the return of our deposit and related interest.

Contingencies

On and after June 26, 2014, U.S. Customs and Border Protection (CBP) issued pre-penalty notifications to us and two of our affiliates alleging failure to properly report the importation of spare parts incorporated into our vessels covering the period April 2008 through September 2012. Under these notifications, CBP’s proposed duty is currently approximately $1.4 million along with a proposed penalty on the assessment of approximately $5.7 million.  The basis of CBP’s assessment is that the U. S. Government experienced a loss of revenue consisting of the difference between the government’s ad valorem duty and the consumption entry duty actually paid by us.  On September 24, 2014, we submitted our formal response to CBP’s claim and denied violating the applicable U.S. statute or regulations.  We have not accrued a liability for this matter because we believe it is premature (i) to determine whether an accrual is warranted and (ii) if so, to determine a reasonable estimate of probable liability.

For discussion on contingencies related to operating leases, refer to Note 5 – Debt and Lease Obligations. For further information on our commitments and contingencies, see Note M – Commitments and Contingencies to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.