NOTE 2—ACQUISITIONS, DISPOSITIONS AND ATLANTIC AND CORPORATE RESTRUCTURING

Acquisitions

During the quarter ended March 31, 2013, we entered into a share purchase agreement to acquire all of the issued and outstanding shares of capital stock of Deepsea Group Limited, a United Kingdom-based company that provides subsea and other engineering services to international energy companies, primarily through offices in the United Kingdom and the United States. The total consideration we paid for the acquisition was approximately $9.0 million, which includes cash ($6.0 million) and the delivery of 313,580 restricted shares of MII common stock (out of treasury). The transaction is being accounted for using the acquisition method and, accordingly, assets acquired and liabilities assumed are recorded at their respective fair values. Subsequent to the acquisition, the purchase price allocation was performed and, as a result, goodwill of $5.5 million was recognized.

During the quarter ended December 31, 2013, we entered into two joint ventures with TH Heavy Engineering Berhad (“THHE”), whereby we acquired a 30% interest in a subsidiary of THHE, THHE Fabricators Sdn. Bhd., and THHE acquired a 30% interest in our Malaysian subsidiary, Berlian McDermott Sdn. Bhd. Accounting for these transactions is preliminary at December 31, 2013 and is pending finalization of these transactions during early 2014. As of December 31, 2013, we recorded an equity method investment of approximately $25.5 million, a non-controlling interest of approximately $20.9 million and an increase in capital in excess of par value of approximately $4.6 million arising from these transactions.

Assets Held for Sale

We previously committed to a plan to sell four of our multi-function marine vessels, specifically the Bold Endurance, DB 16, DB 26 and the DLB KP1. Assets classified as held for sale are no longer depreciated. During the quarter ended March 31, 2013, we completed the sale of theBold Endurance and the DB 26 for aggregate cash proceeds of approximately $32.0 million, resulting in an aggregate gain of approximately $12.5 million. We remain in active discussions with interested parties to sell the DB 16 and DLB KP1.

On August 26, 2011, we completed the sale of the DB 23 marine vessel. Cash consideration received from the vessel sale was approximately $8.0 million, resulting in a pre-tax gain of $7.7 million that is included in our consolidated statements of operations for the year ended December 31, 2011 for the Atlantic segment.

Discontinued Operations

The following discussion provides information pertaining to our significant discontinued operations.

Charter Fleet Business

On March 19, 2012, we completed the sale of our former charter fleet business, which operated 10 of the 14 vessels acquired in our 2007 Secunda Acquisition. For the year ended December 31, 2011, we recognized an approximate $22.0 million write-down of our former charter fleet business. The write-down was based on the estimated fair value of consideration expected from the sale, including estimated selling costs, and we considered that fair value measurement as Level 2. The following table presents selected financial information regarding the results of operations attributable to our former charter fleet business:


	Year Ended December 31,
	2012		2011
	(In thousands)
Revenues	$	8,184	$	44,849

Loss on disposal of discontinued operations, before taxes		257		(21,934	)
Income before provision for income taxes		3,240		10,030

		3,497		(11,904	)
Provision for income taxes		—		(2,908	)

Income (loss) from discontinued operations, net of tax	$	3,497	$	(14,812	)

The following table presents the carrying values of the major classes of assets and liabilities attributable to our former charter fleet business that are included in our consolidated balance sheet:


	December 31, 2011
	(In thousands)
Other current assets	$	3,197

Property, plant and equipment—net		45,892
Other long-term assets		9,679

Total long-term assets held for sale	$	55,571

Atlantic and Corporate Restructuring

We commenced a restructuring of our Atlantic operations during the quarter ended June 30, 2013, which involves our Morgan City, Louisiana, Houston, Texas, New Orleans, Louisiana and Brazil locations. The restructuring involves, among other things, reductions of management, administrative, fabrication and engineering personnel, and a plan to discontinue utilization of the Morgan City facility (after the completion of existing backlog projects, which are currently forecasted to be completed in the third quarter of 2014). Future fabrication operations in the Atlantic segment are expected to be executed using the Altamira, Mexico facility for the foreseeable future. In addition, we have reached an agreement to exit our joint venture operation in Brazil. Costs associated with our Atlantic restructuring activities primarily include severance and other personnel-related costs, costs associated with exiting the joint venture in Brazil, asset impairment and relocation costs, environmental reserves and future unutilized lease costs. The total costs are expected to range between $55 million to $60 million in the aggregate. Of the total anticipated costs, we incurred approximately $14.6 million during the quarter ended December 31, 2013 and had incurred an aggregate of $34.1 million as of December 31, 2013.

In October 2013, we announced certain executive management changes that became effective during the fourth quarter of 2013. We also expect to implement changes to our organizational structure during the first half of 2014. These structure-related changes are expected to orient the Company around offshore and subsea business lines supported by four geographic regions. Costs associated with our corporate reorganization activities will primarily include severance, relocation and other personnel-related costs and costs for advisors. The total of these costs is expected to range between $35 million to $40 million and to be incurred during 2014 and early 2015. Of the total anticipated costs, we incurred approximately $1.6 million during the quarter ended December 31, 2013.

The following table presents total amounts incurred during the year ended December 31, 2013 and amounts expected to be incurred in the future by major type of cost and by segment.


	Incurred as of December 31, 2013		Expected to be incurred		Total
	(In thousands)
Atlantic segment related charges
Impairments and write offs	$	14,163	$	87	$	14,250
Severance and other personnel-related costs		9,645		2,397		12,042
Morgan City environmental reserve		5,925		—		5,925
Morgan City yard-related expenses		4,175		11,032		15,207
Other, including contingency		158		7,418		7,576

	$	34,066	$	20,934	$	55,000
Corporate segment related charges
Severance and other personnel-related costs	$	1,661	$	—	$	1,661
Reorganization		—		32,500		32,500
Other, including contingency		—		839		839

	$	1,661	$	33,339	$	35,000

Total	$	35,727	$	54,273	$	90,000

Included in restructuring costs were $18,044 of non-cash expenses, consisting of impairments and write offs, as well as curtailment costs.

Accrued liabilities associated with restructuring activities were approximately $8.0 million as of December 31, 2013. Included in this amount was a $5.9 million environmental reserve established in connection with our plan to discontinue utilization of the Morgan City fabrication facility.