Quarterly report pursuant to Section 13 or 15(d)

Equipment Acquisitions, Dispositions and Depreciation and Impairment Policies

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Equipment Acquisitions, Dispositions and Depreciation and Impairment Policies
6 Months Ended
Jun. 30, 2015
Equipment Acquisitions, Dispositions And Depreciation And Impairment Policies [Abstract]  
Equipment Acquisitions, Dispositions and Depreciation and Impairment Policies
Property and Equipment. Equipment, stated at cost, is depreciated using the straight-line method over the estimated useful life of the asset to an estimated salvage value. With respect to each class of asset, the estimated useful life is based upon a newly built asset being placed into service and represents the time period beyond which it is typically not justifiable for the Company to continue to operate the asset in the same or similar manner. From time to time, the Company may acquire older assets that have already exceeded the Company’s useful life policy, in which case the Company depreciates such assets based on its best estimate of remaining useful life, typically the next survey or certification date.
As of June 30, 2015, the estimated useful life (in years) of each of the Company’s major categories of new equipment was as follows:
Offshore support vessels (excluding wind farm utility)
20
Wind farm utility vessels
10
Inland river dry-cargo barges
20
Inland river liquid tank barges
25
Inland river towboats
25
Product tankers - U.S.-flag
25
Short-sea Container/RORO(1) vessels
20
Harbor and offshore tugs
25
Ocean liquid tank barges
25
Terminal and manufacturing facilities
20
______________________
(1)
Roll on/Roll off ("RORO").
Equipment maintenance and repair costs and the costs of routine overhauls, drydockings and inspections performed on vessels and equipment are charged to operating expense as incurred. Expenditures that extend the useful life or improve the marketing and commercial characteristics of equipment as well as major renewals and improvements to other properties are capitalized.
Certain interest costs incurred during the construction of equipment are capitalized as part of the assets’ carrying values and are amortized over such assets’ estimated useful lives. During the six months ended June 30, 2015, capitalized interest totaled $9.6 million.
EQUIPMENT ACQUISITIONS, DISPOSITIONS AND IMPAIRMENTS
During the six months ended June 30, 2015, capital expenditures were $132.1 million. Equipment deliveries during the six months ended June 30, 2015 included one fast support vessel, one supply vessel, one wind farm utility vessel and two inland river towboats.
During the six months ended June 30, 2015, the Company sold two offshore support vessels, one 10,000 barrel inland river tank barge, twelve inland river deck barges and other property and equipment for net proceeds of $24.7 million, ($22.7 million in cash and $2.0 million in seller financing) and gains of $3.6 million, of which $1.6 million were recognized currently and $2.0 million were deferred. In addition, the Company recognized previously deferred gains of $4.6 million.
During the six months ended June 30, 2015, the Company recognized impairment charges of $6.6 million related to the suspended construction of two offshore support vessels.