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Note 8 - Long-Lived Assets
3 Months Ended
Mar. 31, 2013
Long Lived Assets [Text Block]
8.    Long-Lived Assets

The Company regularly performs reviews of its long-lived assets to determine if facts or circumstances are present, either internal or external, that would indicate that the carrying values of its long-lived assets may not be recoverable. For more details, refer to the Summary of Significant Accounting Policies in Note 1 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Property and Equipment, Net

The components of property and equipment, net, as of March 31, 2013 and December 31, 2012 were as follows:

   
March 31, 2013
   
December 31, 2012
 
   
(in thousands)
 
             
Rigs and other equipment
  $ 70,617     $ 68,404  
Buildings and improvements
    13,183       12,019  
Land
    1,068       1,068  
Vehicles
    1,744       1,639  
Furniture and fixtures
    289       289  
Assets in progress
    1,345       2,342  
      88,246       85,761  
Accumulated depreciation
    (10,573 )     (7,993 )
Property and equipment, net
  $ 77,673     $ 77,768  

Depreciation expense for the three-month period ended March 31, 2013 aggregated $2.6 million, with $2.5 million in “Cost of revenues” and $0.1 million in “Selling, general and administrative” expenses in the Condensed Statement of Operations. Depreciation expense for the three-month period ended March 31, 2012 aggregated $1.0 million, with $0.9 million in “Cost of revenues” and $0.1 million in “Selling, general and administrative” expenses in the Condensed Statement of Operations.

During the three-month period ended March 31, 2012, the Company wrote down $0.1 million of property and equipment from a Steel Sports company to zero-value, as it was not meeting forecasted projections, with no expectation to perform as represented when acquired. This write-down is included in “Loss from discontinued operations, net of taxes” in the Condensed Statement of Operations.

Intangible Assets, Net

The components of intangible assets, net, as of March 31, 2013 were as follows:

   
March 31, 2013
           
   
Cost
   
Accumulated
Amortization
   
Net
 
  Amortization
Method
 
Estimated
Useful Life (years)
 
   
(in thousands)
           
Steel Sports:
                           
Customer relationships
  $ 235     $ (78 )     157  
Straight-line
   
5
 
                                   
Steel Energy:
                                 
Customer relationships
    43,100       (8,372 )     34,728  
Accelerated
   
10
 
Trade names
    4,100       (1,499 )     2,601  
Accelerated
   
5
 
      47,200       (9,871 )     37,329            
 
  $ 47,435     $ (9,949 )   $ 37,486            

Amortization expense for the three-month period ended March 31, 2013 and 2012 aggregated $2.4 million and $0.8 million, respectively, which was included in “Selling, general and administrative” expenses in the Condensed Statements of Operations.

The components of intangible assets, net, as of December 31, 2012 were as follows:

      December 31, 2012          
    Cost    
Accumulated
Amortization
    Net  
Amortization
Method
 
Estimated
Useful Life
(years)
 
      (in thousands)            
Steel Sports:
                                 
Customer relationships
  $
235
    $
(67)
     
              168
 
Straight-line
   
5
 
                                   
Steel Energy:
                                 
Customer relationships
   
         43,100
     
                (6,356)
     
         36,744
 
Accelerated
   
10
 
Trade names
   
           4,100
     
                (1,125)
     
           2,975
 
Accelerated
   
5
 
     
         47,200
     
                (7,481)
     
         39,719
           
 
  $
47,435
    $
(7,548)
    $
39,887
           

Estimated aggregate future amortization expenses for the next five years for the intangible assets by reporting segment are as follows:

   
Steel Sports
   
Steel Energy
   
Total
 
   
(in thousands)
 
For the year ended December 31:
                 
2013 (remaining nine months)
  $ 35     $ 6,145     $ 6,180  
2014
    47       6,565       6,612  
2015
    47       5,234       5,281  
2016
    28       4,245       4,273  
2017
    -       3,158       3,158  
Thereafter
    -       11,982       11,982  
    $ 157     $ 37,329     $ 37,486  

Goodwill

A reconciliation of the changes to the Company’s carrying amount of goodwill for the three-month period ended March 31, 2013 follows:

   
Amount
 
   
(in thousands)
 
       
Balance, December 31, 2012
  $ 53,093  
Goodwill acquired in the acquisition of Sports-event Company
    5,164  
Balance, March 31, 2013
  $ 58,257  

The components of goodwill at March 31, 2013 and December 31, 2012 are as follows:

   
March 31, 2013
   
December 31, 2012
 
   
(in thousands)
 
             
Goodwill
  $ 60,245     $ 55,081  
Accumulated impairment
    (1,988 )     (1,988 )
Net goodwill
  $ 58,257     $ 53,093  

Goodwill at March 31, 2013 includes VIE goodwill of $5.2 million. There was no VIE goodwill at December 31, 2012. During the three-month period ended March 31, 2012, the Company wrote off the goodwill of a Steel Sports company that was not meeting forecasted projections, which is included in “Loss from discontinued operations, net of taxes” in the Condensed Statement of Operations.