4.	PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

	December 31,
	2015			2014

Land and improvements	$	23,903		$	23,689
Buildings		44,409			42,368
Machinery and equipment		146,704			140,578
Equipment under capital lease		924			6,001
Construction in progress		2,359			4,183
		218,299			216,819
Less accumulated depreciation and amortization		(86,451	)		(84,224	)
Property and equipment, net	$	131,848		$	132,595

Depreciation expense, which includes amortization of capital lease assets, was $9.1 million, $13.6 million, and $13.3 million for the years ended December 31, 2015, 2014, and 2013, respectively. Accumulated amortization associated with property and equipment under capital leases was $0.3 million and $4.2 million at December 31, 2015 and 2014, respectively.

In conjunction with the preparation of its financial statements for the year ended December 31, 2015, the Company determined that an impairment triggering event as defined in ASC 360-10 had occurred for the Atchison asset group included within the Tubular Products segment, due to continued operating losses and plans to idle the Atchison facility in January 2016. The Company performed a recoverability test for the asset group, in which the carrying value of the asset group was compared against associated undiscounted future cash flows. This analysis determined that the undiscounted future cash flows substantially exceeded the carrying value of the asset group; thus, the carrying value of the asset group was not impaired at December 31, 2015.

In conjunction with the preparation of its financial statements for the quarter ended June 30, 2015, the Company determined that an impairment triggering event as defined in ASC 360-10 had occurred for the asset group included within the Water Transmission segment due to the impairment of its Water Transmission goodwill. The Company performed a recoverability test for the asset group, in which the carrying value of the asset group was compared against associated undiscounted future cash flows. This analysis determined that the undiscounted future cash flows substantially exceeded the carrying value of the asset group; thus, the carrying value of the asset group was not impaired at June 30, 2015. Subsequent to June 30, 2015, no triggering events for the Water Transmission asset group have occurred, and therefore a quantitative recoverability test for this asset group was not performed at December 31, 2015.

In conjunction with the preparation of its financial statements for the year ended December 31, 2014, the Company determined that an impairment triggering event as defined in ASC 360-10 had occurred for the asset groups included within the Tubular Products segment due to the impairment of its Tubular Products goodwill (see Note 5, “Goodwill and Intangible Assets”). The Company performed a recoverability test for each asset group, in which the carrying value of the asset group was compared against associated undiscounted future cash flows. This analysis determined that the carrying values of the asset groups were recoverable at December 31, 2014.

In conjunction with the preparation of its financial statements for the year ended December 31, 2013, the Company determined that an impairment triggering event as defined in ASC 360-10 had occurred for the assets located at its Bossier City, Louisiana facility due to increased competition in the OCTG market, pricing pressures from imported pipe, and growing inventory balances. This facility was included within our Tubular Products Group. The Company performed a recoverability test in which the carrying values of the asset groups were compared against the probability weighted undiscounted future cash flows of various future scenarios using Company-specific assumptions. The analysis determined that the carrying value of the asset group was not recoverable as the undiscounted cash flows were less than the carrying value of the asset group. The Company then compared the carrying value to the fair market value of the asset group. Management determined fair value using third-party appraisals, as discussed in Note 8. This analysis resulted in an impairment charge of $27.5 million, which is included in discontinued operations for 2013 as the related assets were sold as part of the sale of the OCTG business in March 2014.