Note 4 - Vessel Acquisitions, Dispositions and New-build Program

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

(4

) VESSEL ACQUISITIONS

,

DISPOSITIONS

AND

NEW-BUILD PROGRAM

During

2016,

we sold

one

older vessel from our North Sea region fleet and

three

vessels from our Southeast Asia fleet for combined proceeds of

$6.5

million. The sales of these vessels generated a combined loss on sales of assets of

$8.6

million. In

March

2017,

we sold

two

of our fast supply vessels and will record a

first

quarter

2017

combined loss on sales of assets of

$5.3

million.

At

December

31,

2015,

we had

two

vessels under construction in the U.S. that were significantly delayed. In

March

2016,

we resolved certain matters under dispute with the shipbuilder and reset the contract schedules so that we would take delivery of the

first

vessel in mid-

2016

and the

second

vessel in mid-

2017,

at which time a final payment of

$26.0

million would be due. We took delivery of the

first

of these vessels during the

second

quarter of

2016.

Under the settlement, we can elect not to take delivery of the

second

vessel and forego the final payment, in which case the shipbuilder will retain the vessel.

We had a vessel under construction in Norway that was scheduled to be completed and delivered during the

first

quarter of

2016;

however, in the

fourth

quarter of

2015

we amended our contract with the shipbuilder to delay delivery of the vessel until

January

2017.

Concurrently, in order to delay the payment of a substantial portion of the construction costs, we agreed to pay monthly installments through

May

2016

totaling

92.2

million NOK (or approximately

$11.0

million) and to pay a final installment on delivery in

January

2017

of

195.0

million NOK (or approximately

$23.3

million at delivery). We paid such final installment and took delivery of this vessel in

January

2017.

Vessel Additions Since December 31, 2015
			Year	Length						Month
Vessel	Region	Type (1)	Built	(feet)		BHP (2)		DWT (3)		Delivered
Hercules	Americas	LgPSV	2016		286		10,960		5,300	Jun-16
North Barents	N. Sea	LgPSV	2017		304		11,935		4,700	Jan-17

Vessels Disposed of Since December 31, 2015
			Year	Length						Month
Vessel	Region	Type (1)	Built	(feet)		BHP (2)		DWT (3)		Disposed
Highland Spirit	N. Sea	SpV	1998		202		6,000		1,620	May-16
Sea Intrepid	SEA	SmAHTS	2005		193		5,150		1,500	Jul-16
Sea Guardian	SEA	SmAHTS	2006		193		5,150		1,500	Jul-16
Highland Drummer	SEA	LgPSV	1997		220		5,450		3,122	Nov-16
Mako	Americas	FSV	2008		181		7,200		552	Mar-17
Tiger	Americas	FSV	2009		181		7,200		552	Mar-17

(1)

LgPSV - Large Platform Supply Vessel, SpV - Special Purpose Vessel, SmAHTS - Small Anchor Handling Vessel, FSV - Fast Supply Vessel

(2)

BHP - Brake Horsepower

(3)

DWT - Deadweight Tons

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

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
Highland Trader	N. Sea	LgPSV	1996		220		5,450		3,115	Jul-15
Highland Star	N. Sea	LgPSV	1991		268		6,600		3,075	Nov-15

(1)

LgPSV - Large Platform Supply Vessel

(2)

BHP - Brake Horsepower

(3)

DWT - Deadweight Tons