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IMPAIRMENTS AND (GAIN) LOSS ON ASSETS HELD FOR SALE | 12 Months Ended
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Dec. 31, 2020
Assets Held For Sale Not Part Of Disposal Group [Abstract] |
IMPAIRMENTS AND (GAIN) LOSS ON ASSETS HELD FOR SALE | 3. IMPAIRMENTS AND (GAIN) LOSS ON ASSETS HELD FOR SALE Impairments and (gain) loss on assets held for sale – Impairments and (gain) loss on assets held for sale (“AHFS”) generally represents asset impairments, gains or losses on the sale of assets held for sale and certain nonrecurring items. A summary of our impairments and (gain) loss on assets held for sale for 2020, 2019 and 2018, is as follows:
|  | Year Ended December 31, 2020 |
Impairments and (gain) loss on assets held for sale |  | Shipyard |  |  | F&S |  |  | Corporate |  |  | Total |
Impairments of AHFS |  | $ | — |  |  | $ | 1,400 |  |  | $ | — |  |  | $ | 1,400 |
Impairments of Jennings Yard assets |  |  | 29 |  |  |  | — |  |  |  | — |  |  |  | 29 |
Impairments of Lake Charles Yard assets |  |  | 1,006 |  |  |  | — |  |  |  | — |  |  |  | 1,006 |
Impairments of other assets |  |  | 6 |  |  |  | 868 |  |  |  | — |  |  |  | 874 |
Loss on AHFS and other |  |  | 598 |  |  |  | 223 |  |  |  | — |  |  |  | 821 |
Total |  | $ | 1,639 |  |  | $ | 2,491 |  |  | $ | — |  |  | $ | 4,130 |
| • | Impairments of AHFS – At December 31, 2020, our assets held for sale totaled $8.2 million and primarily consisted of three 660-ton crawler cranes and two drydocks (which were classified as held for sale for sale in the fourth quarter 2020). As discussed below, during 2019 we recorded partial impairments of the crawler cranes. During 2020, we recorded additional impairments of $1.4 million associated with the partial impairment of the cranes. Our estimates of fair value for the cranes were based on broker opinions of value, which were lower than our previous estimates due to changes in market conditions (including the impacts of COVID-19), the limited interest received in the cranes during the period, the specific use nature and
|  | size of the cranes, and our expectation of a shorter marketing period due to concerns regarding future deterioration of the cranes. See “Impairments of Lake Charles Yard assets” below for discussion of the partial impairments of our drydock s in connection with the ir classification as held for sale.
| • | Impairments of Jennings Yard assets – During the fourth quarter 2020, we closed our Jennings Yard, which is subject to a long-term lease. As discussed below, during 2019 we recorded full impairments of our lease asset and non-moveable facility improvements and partial impairments of our moveable equipment. In connection with the facility’s fourth quarter 2020 closure, we had no material additional impairments of moveable equipment, which was relocated to our Houma Yards. See below for further discussion of the impairments recorded in 2019 and Note 4 for discussion of our Jennings Yard lease. We do not believe the closure of the Jennings Yard will impact our ability to operate our Shipyard Division, and it does not qualify for discontinued operations presentation as we will continue to operate our Shipyard Division from our Houma Yards.
| • | Impairment of Lake Charles Yard assets – During the fourth quarter 2020, we closed our Lake Charles Yard, which is subject to a long-term lease. As discussed below, during 2019 we recorded a full impairment of our non-moveable facility improvements and partial impairments of the lease asset, three drydocks and moveable equipment. In connection with the facility’s fourth quarter 2020 closure, we recorded additional impairments of $1.0 million associated with the full impairment of the lease asset and partial impairment of our moveable equipment and drydocks. The moveable equipment and one of the drydocks were relocated to our Houma Yards to be used in our Shipyard Division operations. The remaining two drydocks were relocated to our Houma Yards and are held for sale at December 31, 2020. Our estimates of fair value for the drydocks were based on appraisals for such assets. See below for further discussion of impairments recorded in 2019 and discussion of our assets held for sale and Note 4 for discussion of our Lake Charles Yard lease. We do not believe t he closure of the Lake Charles Yard will impact our ability to operate our Shipyard Division, and it does not qualify for discontinued operations presentation as we will continue to operate our Shipyard Division from our Houma Yards.
| • | Impairments of other assets – During the fourth quarter 2020, we relocated and consolidated certain assets (including our pipe mill) between our Shipyard Division and F&S Division, and abandoned certain other assets, within our Houma Yards to improve operational efficiency. As a result, during 2020 we recorded impairments of $0.9 million associated with the partial or full impairment of such assets. We determined our impairments of the assets based on scrap value estimates of fair value.
| • | Loss on AHFS and other – During 2020, we incurred costs of $0.6 million, primarily associated with the closures of our Jennings Yard and Lake Charles Yard, as discussed above. We also sold a deck barge, two plate roll machines and certain other assets which were classified as held for sale for total proceeds of $1.7 million, resulting in a loss of $0.2 million.
|  | Year Ended December 31, 2019 |
Impairments and (gain) loss on assets held for sale |  | Shipyard |  |  | F&S |  |  | Corporate |  |  | Total |
Impairments of AHFS |  | $ | 324 |  |  | $ | 7,842 |  |  | $ | — |  |  | $ | 8,166 |
Impairments of assets removed from AHFS |  |  | — |  |  |  | 1,060 |  |  |  | — |  |  |  | 1,060 |
Impairments of Jennings Yard assets |  |  | 4,578 |  |  |  | — |  |  |  | — |  |  |  | 4,578 |
Impairments of Lake Charles Yard assets |  |  | 2,998 |  |  |  | — |  |  |  | — |  |  |  | 2,998 |
Impairments of inventory and other assets |  |  | — |  |  |  | 400 |  |  |  | 21 |  |  |  | 421 |
(Gain) loss on AHFS and other |  |  | 20 |  |  |  | (369 | ) |  |  | 654 |  |  |  | 305 |
Total |  | $ | 7,920 |  |  | $ | 8,933 |  |  | $ | 675 |  |  | $ | 17,528 |
| • | Impairments of AHFS – At December 31, 2019, our assets held for sale totaled $9.0 million and primarily consisted of three 660-ton crawler cranes, two plate bending roll machines and a deck barge. During 2019, we revised our estimates of fair value for the crawler cranes based on updated broker opinions of value and revised our estimates of fair value for the plate bending roll machines based on third party indications of value. Our revised estimates of fair value for these assets were lower than our previous estimates due to changes in market conditions, the limited interest received in the assets during the period, the specific use nature of the assets (and the size of the assets in the case of the cranes), and our expectation of a shorter marketing period due to concerns regarding future deterioration of the assets. As a result of the aforementioned, during 2019 we recorded impairments of $7.8 million associated with the partial impairment of the crawler cranes and plate bending roll machines. During 2019, we also recorded an impairment of $0.3 million associated with the partial impairment of a drydock that was held-for-sale and sold during 2019 for proceeds of $0.6 million.
| • | Impairments of assets removed from AHFS – During 2019, we determined that we no longer intended to sell a deck barge (separate from the aforementioned deck barge) and panel line equipment that was previously classified as held for sale, and the assets were reclassified as property, plant and equipment. In connection therewith, the assets were recorded at the lower of their fair value or net book value as if they had been depreciated while being classified as held for sale, which resulted in impairments of $1.1 million during 2019.
| • | Impairments of Jennings Yard assets – During 2019, we reassessed our previous estimates of the future cashflows expected to be generated by our leased Jennings Yard. Our revised forecast gave consideration to recent operating losses experienced on our harbor tug projects in the Jennings Yard and our intention to clos e the facility. Based on our revised forecast, we determined that the net book value of the Jennings Yard assets exceeded our estimates of future cashflows, which indicated that the assets were impaired. Our Jennings Yard assets primarily consist ed of a lease asset, non-moveable facility improvements and certain moveable equipment. We based our impairments of the lease asset and non-moveable facility improvements on our expectation to close the facility, and we based our impairments of the moveable equipment on broker opinions of value for such assets. As a result of the aforementioned, during 2019 we recorded impairments of $4.6 million associated with the full impairment of the lease asset and non-moveable facility improvements and partial impairment of moveable equipment. See above for discussion of our closure of the Jennings Yard in the fourth quarter 2020 and Note 4 for further discussion of our Jennings Yard lease.
| • | Impairments of Lake Charles Yard assets – During 2019, we reassessed our previous estimates of the future cashflows expected to be generated by our leased Lake Charles Yard. Our revised forecast gave consideration to previous and then current under-utilization of the facility, our expectations of future work for the facility and the required future capital investment in the facility and its assets. Based on our revised forecast, we determined that the net book value of the Lake Charles Yard assets exceeded our estimates of future cashflows, which indicated that the assets were impaired. Our Lake Charles Yard assets primarily consisted of a lease asset, non-moveable facility improvements, three drydocks and certain moveable equipment. We based our impairments of the lease asset and non-moveable facility improvements on our anticipated cashflows from such assets, and we based our impairments of the drydocks and moveable equipment on appraisals and broker opinions of value for such assets. As a result of the aforementioned, during 2019 we recorded impairments of $3.0 million associated with the full impairment of the non-moveable facility improvements and partial impairment of the lease asset, drydocks and moveable equipment. See above for discussion of our closure of the Lake Charles Yard in the fourth quarter 2020 and Note 4 for further discussion of our Lake Charles Yard lease.
| • | Impairments of inventory and other assets – During 2019, we abandoned certain inventory and fixed assets and recorded impairments of $0.4 million associated with the partial impairment of the assets. We determined our impairments of the assets based on scrap value estimates of fair value.
| • | Loss on AHFS and other – During 2019, we recorded charges of $0.5 million associated with amounts payable to our former chief executive officer in connection with his retirement during the fourth quarter 2019. Such amounts were paid during 2020 and did not require any future service. We also recorded a gain of $0.4 million associated with the sale of assets held for sale.
|  | Year Ended December 31, 2018 |
Impairments and (gain) loss on assets held for sale |  | Shipyard |  |  | F&S |  |  | Corporate |  |  | Total |
Gain on sale of South Texas Properties, net |  | $ | — |  |  | $ | (7,724 | ) |  | $ | — |  |  | $ | (7,724 | )
Impairments of AHFS |  |  | 964 |  |  |  | 1,387 |  |  |  | — |  |  |  | 2,351 |
Impairments of inventory and other assets |  |  | — |  |  |  | 2,094 |  |  |  | — |  |  |  | 2,094 |
Gain from insurance proceeds |  |  | — |  |  |  | (3,571 | ) |  |  | — |  |  |  | (3,571 | )
Total |  | $ | 964 |  |  | $ | (7,814 | ) |  | $ | — |  |  | $ | (6,850 | )
| • | South Texas Properties and Gain on Sale of South Texas Properties, net – During 2017, we classified our fabrication yards and certain associated equipment in Ingleside, Texas (“Texas South Yard”) and Aransas Pass, Texas (“Texas North Yard”) (collectively, “South Texas Properties”) as held for sale. During 2018, we completed the sale of portions of the South Texas Properties, which consisted of the following:
| - | The sale of certain equipment prior to the sale of the South Texas Properties for proceeds of $1.3 million, and a loss of $0.3 million;
| - | The sale of our Texas South Yard for $55.0 million, less selling costs of $1.2 million, for total net proceeds received during 2018 of $53.8 million and a gain of $3.9 million; and
| - | The sale of our Texas North Yard for $28.0 million, less selling costs of $0.6 million, for total net proceeds of $27.4 million during 2018 and a gain of $4.1 million.
Remaining equipment from the Texas North Yard totaling $18.8 million was not included in the Texas North Yard sale, of which $0.8 million was placed back in use and reclassified to property, plant and equipment, net and $18.0 million was classified as held for sale. The assets held for sale primarily consisted of three 660-ton crawler cranes, a deck barge, two plate bending roll machines and panel line equipment, which were relocated to our Houma Yards.
| • | Impairments of AHFS – During 2018, we recorded impairments of $1.4 million for certain equipment previously associated with the South Texas Properties prior to their sale, but not sold in connection with the Texas South Yard or Texas North Yard transactions. In addition, during 2018 we recorded an impairment of $1.0 million for a drydock that was held for sale. Our impairments were based on our best estimate of the fair value of the assets.
| • | Impairments of inventory and other assets – During 2018, we abandoned certain inventory and other assets and recorded impairments of $2.1 million. We determined our impairments of the assets based on scrap value estimates of fair value.
| • | Gain from insurance proceeds – During 2017, buildings and equipment located at our South Texas Properties were damaged by Hurricane Harvey. During 2018, we agreed to a global settlement with our insurance carriers for total insurance payments of $15.4 million, of which $6.0 million had been received in 2017 and $9.4 million was received during 2018. We allocated the insurance recoveries as follows:
| - | $1.3 million, recorded during 2017, which offset clean-up and repair related costs incurred directly related to the damage as a result of Hurricane Harvey, resulting in no net gain or loss,
| - | $1.5 million recorded during 2017, which offset impairments of two buildings which were determined to be a total loss as a result of Hurricane Harvey, resulting in no net gain or loss;
| - | $9.0 million, recorded during 2018, which offset impairments of property and equipment, primarily at our Texas North Yard, resulting in no net gain or loss. The impairments were based upon our best estimate of the decline in fair value of the asset group as a result of Hurricane Harvey; and
| - | $3.6 million gain recorded during 2018.
Assets held for sale – As discussed above, at December 31, 2020, our assets held for sale primarily consisted of three 660-ton crawler cranes within our Fabrication & Services Division and two drydocks within our Shipyard Division, which were classified as held for sale during 2020. A summary of our assets held for sale at December 31, 2020 and 2019, is as follows (in thousands):
|  | December 31, |
|  | 2020 |  |  | 2019 |
Assets |  | Shipyard |  |  | F&S |  |  | Total |  |  | Shipyard |  |  | F&S |  |  | Total |
Machinery and equipment |  | $ | 3,619 |  |  | $ | 12,780 |  |  | $ | 16,399 |  |  | $ | — |  |  | $ | 17,618 |  |  | $ | 17,618 |
Accumulated depreciation |  |  | (1,605 | ) |  |  | (6,580 | ) |  |  | (8,185 | ) |  |  | — |  |  |  | (8,612 | ) |  | $ | (8,612 | )
Total assets held for sale |  | $ | 2,014 |  |  | $ | 6,200 |  |  | $ | 8,214 |  |  | $ | — |  |  | $ | 9,006 |  |  | $ | 9,006 |

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