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SALE/LEASEBACK ARRANGEMENTS | 12 Months Ended
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Mar. 31, 2017
Leases [Abstract] |
SALE/LEASEBACK ARRANGEMENTS |
(11) | SALE/LEASBACK ARRANGEMENTS
Please refer to Note (2) of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding the negotiations with its Lenders and Noteholders, Restructuring Support Agreement and Reorganization and Chapter 11 Proceedings for further discussion of the effect of these proceedings on the company’s sale/leaseback obligations. Fiscal 2015 Sale/Leasebacks During fiscal 2015, the company sold six vessels to unrelated third parties, and simultaneously entered into bareboat charter agreements with the purchasers. Under the sale/leaseback agreements the company has the right to re-acquire the vessel for a fixed percentage of the original sales price at a defined date during the lease, deliver the vessel to the owners at the end of the lease term, purchase the vessel at its then fair market value at the end of the lease term or extend the leases for 24 months at mutually agreeable lease rates. The company is accounting for these transactions as sale/leasebacks with operating lease treatment and will record the payments as vessel operating lease expense on a straight-line basis over the lease term. The deferred gains will be amortized to gain on asset dispositions, net ratably over the respective lease term. Any deferred gain balance remaining upon the repurchase of the vessels would reduce the vessels’ stated cost if the company elects to exercise the purchase options. The following table provides the number of vessels, total proceeds, carrying values at the time of sale, deferred gains recognized, lease expirations, and contractual purchase option timing for the vessels sold and leased back by the company during fiscal 2015:
Fiscal 2015 Quarter |  | Number of Vessels |  |  | Total Proceeds |  |  | Carrying Value at time of Sale |  |  | Deferred Gain at time of Sale |  |  | Lease Term in Years |  |  | Purchase Option Percentage |  |  | Purchase Option at at end of:
First |  |  | 1 |  |  | $ | 13,400 |  |  | $ | 4,002 |  |  | $ | 9,398 |  |  |  | 7 |  |  |  | 61% |  |  | 6th Year
Second |  |  | 1 |  |  |  | 19,350 |  |  |  | 8,214 |  |  |  | 11,136 |  |  |  | 8.5 |  |  |  | 47% |  |  | 8th Year
Third |  |  | 3 |  |  |  | 78,200 |  |  |  | 33,233 |  |  |  | 44,967 |  |  | 8 – 9 |  |  |  | 60% |  |  | 7th or 8th Year
Fourth |  |  | 1 |  |  |  | 13,000 |  |  |  | 5,115 |  |  |  | 7,885 |  |  | 7 |  |  |  | 50% |  |  | 6th Year
|  |  | 6 |  |  | $ | 123,950 |  |  | $ | 50,564 |  |  | $ | 73,386 |  |  |  |  |  |  |  |  |  |  |
Fiscal 2014 Sale/Leasebacks During fiscal 2014, the company sold ten vessels to unrelated third parties, and simultaneously entered into bareboat charter agreements with the purchasers. Under the sale/leaseback agreements the company has the right to re-acquire the vessel for a fixed percentage of the original sales price at a defined date during the lease, deliver the vessel to the owners at the end of the lease term, purchase the vessel at its then fair market value at the end of the lease term or extend the leases for 24 months at mutually agreeable lease rates. The company is accounting for these transactions as sale/leasebacks with operating lease treatment and will record the payments as vessel operating lease expense on a straight-line basis over the lease term. The deferred gains will be amortized to gain on asset dispositions, net ratably over the respective lease term. Any deferred gain balance remaining upon the repurchase of the vessels would reduce the vessels’ stated cost if the company elects to exercise the purchase options. The following table provides the number of vessels, total proceeds, carrying values at the time of sale, deferred gains recognized, lease expirations, and contractual purchase option timing for the vessels sold and leased back by the company during fiscal 2014:
Fiscal 2014 Quarter |  | Number of Vessels |  |  | Total Proceeds |  |  | Carrying Value at time of Sale |  |  | Deferred Gain at time of Sale |  |  | Lease Term in Years |  |  | Purchase Option Percentage |  |  | Purchase Option at at end of:
Second |  |  | 2 |  |  | $ | 65,550 |  |  | $ | 34,325 |  |  | $ | 31,225 |  |  |  | 7 |  |  |  | 55% |  |  | 6th Year
Third |  |  | 4 |  |  |  | 141,900 |  |  |  | 105,649 |  |  |  | 36,251 |  |  | 7 – 9 |  |  | 54 - 68% |  |  | 6th or 8th Year
Fourth |  |  | 4 |  |  |  | 63,305 |  |  |  | 32,845 |  |  |  | 30,460 |  |  | 7 – 10 |  |  | 53 - 59% |  |  | 6th or 9th Year
|  |  | 10 |  |  | $ | 270,755 |  |  | $ | 172,819 |  |  | $ | 97,936 |  |  |  |  |  |  |  |  |  |  |
Future Minimum Lease Payments As of March 31, 2017, the future minimum lease payments for the vessels under the operating lease terms are as follows:
Fiscal year ending (In thousands) |  | Fiscal 2015 Sale/Leaseback |  |  | Fiscal 2014 Sale/Leaseback |  |  | Total |
2018 |  | $ | 9,604 |  |  |  | 23,486 |  |  |  | 33,090 |
2019 |  |  | 10,234 |  |  |  | 24,800 |  |  |  | 35,034 |
2020 |  |  | 11,497 |  |  |  | 25,519 |  |  |  | 37,016 |
2021 |  |  | 11,594 |  |  |  | 19,979 |  |  |  | 31,573 |
2022 |  |  | 10,283 |  |  |  | 7,932 |  |  |  | 18,215 |
Thereafter |  |  | 8,990 |  |  |  | 12,131 |  |  |  | 21,121 |
Total future lease payments |  | $ | 62,202 |  |  |  | 113,847 |  |  |  | 176,049 |

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- Definition The entire disclosure for sale leaseback transactions. Includes the elements of a transaction involving the sale of property to another party and the lease of the property back to the seller. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 40 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6456377&loc=d3e50824-112756 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6456341&loc=d3e50796-112755 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6452660&loc=d3e36991-112694 + Details
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