Property, Plant and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

NOTE 5. PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment consist of the following at December 31:

(in thousands)	Range of useful lives	2022			2021
Land		$	7,171		$	7,171
Buildings and improvements	10-40 years		137,567			128,387
Machinery and equipment	2-25 years		425,713			375,860
Construction in progress			18,484			20,906
			588,935			532,324
Less: accumulated depreciation			(270,751	)		(240,004	)
Total property, plant and equipment, net		$	318,184		$	292,320

Depreciation expense for property and equipment, including assets under finance leases, was $37.6 million, $30.6 million and $25.2 million in 2022, 2021 and 2020, respectively. In June 2022, we announced a project to expand and modernize our Waldo, Arkansas sawmill with completion expected in 2024. We expect to spend approximately $131.0 million on the project, of which $12.2 million was spent in 2022. Additionally, we accelerated the useful life of certain property, plant and equipment identified to be replaced as part of the sawmill expansion resulting in approximately $7.0 million of additional depreciation expense during the year ended December 31, 2022. These assets are expected to remain in use until the project is complete.

OLA, ARKANSAS SAWMILL FIRE

On June 13, 2021, a fire occurred at our Ola, Arkansas sawmill. There were no injuries or environmental issues from the fire. The damage was principally limited to the large log primary breakdown area of the mill. The planer mill, kiln, and shipping department were not affected. We have adequate property damage and business interruption insurance and expect to be reimbursed for both property damage and business interruption losses by our insurance carriers, subject to a $2.0 million deductible, under which we filed a claim with the insurance carriers. The new equipment has been installed and the large log line restarted in September 2022. The sawmill is expected to reach its full production rate by the end of the first quarter of 2023. We plan to finalize our insurance claim and expect to receive the remaining insurance proceeds in 2023.

Damaged and obsolete fixed asset write-offs, disposal costs, insurance recoveries for the Ola, Arkansas sawmill fire and net gain on fire damage consist of the following for the year ended December 31:

(in thousands)	2022			2021
Fixed asset write-offs		-			(9,544	)
Disposal costs		(924	)		(2,595	)
Total fixed asset loss on disposal		(924	)		(12,139	)
Insurance recoveries		35,000			15,000
Gain on fire damage at Ola		34,076			2,861
Insurance recoveries on timberlands fire damage		429			500
Gain on fire damage		34,505			3,361

During the year ended December 31, 2022, we received $35.0 million of insurance recoveries for the Ola sawmill fire, of which we recorded $26.2 million for business interruption recoveries and $8.8 million for property damage. No business interruption insurance was recorded during the year ended December 31, 2021, as discussions with the insurance carriers for business interruption claims were ongoing. During the year ended December 31, 2021, insurance recoveries of $15.0 million were received for property damage at the Ola sawmill. Insurance recoveries are recorded when deemed probable and reasonably estimable.