(2) VESSEL ACQUISITIONS AND DISPOSITIONS

Interest is capitalized in connection with the construction of vessels. During the three months ended March 31, 2015 and March 31, 2014, we capitalized $1.2 million and $2.7 million of interest, respectively.

At December 31, 2014, we classified a North Sea vessel as an asset held for sale and determined that its carrying value was less than our estimate of the amount we would realize in a sale. As a result, we reduced the carrying value by $1.5

million which was included in our results of operations as impairment. The adjusted carrying value of this vessel was based on a purchase and sale agreement. In January 2015, we completed the sale of the asset at its carrying value.

In 2011, our Board of Directors approved the initiation of a new-build construction program. We began the program in the North Sea region where we contracted with three shipyards to build a total of six platform supply vessels (“PSVs”). In late 2011, we exercised an option with one of the shipyards to build an additional PSV. The original estimated cost of these seven PSVs was $288.0

million. The first four of these vessels were delivered in the third quarter of 2013, a fifth vessel was delivered in the fourth quarter of 2013 and the sixth and seventh vessels were delivered in the first quarter of 2014.

In 2012, we signed agreements with two U.S. shipyards (Thoma-Sea and BAE Systems) contracting the two shipyards to build two U.S. flagged PSVs each for the U.S. Gulf of Mexico region. The original estimated total cost of these four PSVs was approximately $168.0

million. The Thoma-Sea vessels have been delivered. The first was delivered in the second quarter of 2014, while the second vessel was delivered in January 2015. Neither of the BAE vessels have been delivered. In addition, both vessels are past the delivery date in the original contract. The current schedule anticipates delivery of the remaining two vessels in the third quarter of 2015 and first quarter of 2016 and additional delays may occur. We are in discussions with BAE to resolve issues arising from the significant delays and other technical problems associated with construction and delivery.

Also in 2012, we placed $52.4

million in escrow related to the two Thoma-Sea new-builds described above and in the table below. Progress payments were drawn from escrow as they became due. There was $3.7

million remaining in escrow, which was presented in long-term assets in the balance sheet as of December

31, 2014, and which were released to Thoma-Sea upon the delivery of the second vessel in January 2015. Funds in the escrow account were invested in U.S. government securities.

In April 2014, we approved the construction of an additional North Sea PSV with an estimated total cost of $60.0 million and an expected delivery date in the first quarter of 2016.

The following tables illustrate the details of the vessels under construction and the vessels added or acquired:

Vessels Under Construction as of April 20, 2015
Construction Yard	Region	Type ⁽¹⁾	Expected Delivery	Length (feet)	BHP ⁽²⁾	DWT ⁽³⁾	Expected Cost
							(millions)
BAE Systems	Americas	LgPSV	Q3 2015	286	10,960	5,300	$ 48.0
BAE Systems	Americas	LgPSV	Q1 2016	286	10,960	5,300	$ 48.0
Simek	N. Sea	LgPSV	Q1 2016	304	11,935	4,700	$ 60.0

Note: Final cost may differ due to foreign currency fluctuations.

Vessels Disposed of Since December 31, 2014
Vessel	Region	Type ⁽¹⁾	Year Built	Length (feet)	BHP ⁽²⁾	DWT ⁽³⁾	Month Disposed

North Truck	N. Sea	LgPSV	1983	265	6,120	3,370	Jan-15

Vessel Additions Since December 31, 2014
Vessel	Region	Type ⁽¹⁾	Year Built	Length (feet)	BHP ⁽²⁾	DWT ⁽³⁾	Month Delivered

Regulus	Americas	LgPSV	2015	272	9,849	3,580	Jan-15

⁽¹⁾

LgPSV - Large Platform Supply Vessel

⁽²⁾

BHP - Brake Horsepower

⁽³⁾

DWT - Deadweight Tons