Claim Settlement Receivable

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Claim Settlement Receivable

Claim Settlement Receivable

On March 24, 2016, the Company entered into a full and final release agreement with BP p.l.c. and various related entities pursuant to which the Company, on its own behalf and on behalf of certain wholly owned subsidiaries, released any and all claims related to the Deepwater Horizon oil spill which occurred on April 20, 2010.  In exchange for this release, the Company will receive $13.2 million, of which $8.2 million remains to be received as of March 31, 2017, from BP Exploration & Production Inc., a large portion of which will reimburse the Company for expenses incurred.  On October 3, 2016, the Company received a $5.0 million payment. The remaining settlement amount will be made in payments of $2.7 million due in October of 2017, 2018 and 2019.  The Company also received a guaranty of payments from BP North America Corporation Inc. As of March 24, 2016, the Company recorded the claim settlement receivable using an imputed interest rate of 3.0%, based on its best estimate of the prevailing market rates for the source of credit, resulting in an initial present value of $12.5 million and a discount of $0.7 million. $12.5 million of the claim settlement was recognized as other income in the Company’s condensed consolidated statements of income for the three months ended March 31, 2016. The discount is being accreted over the term of the receivable using the effective interest method. Interest income for the three months ended March 31, 2017 and the period from March 24, 2016 to March 31, 2016 was less than $0.1 million.