Note 14 - Asset Dispositions, Assets Held for Sale and Asset Impairments

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Asset Impairment Charges [Text Block]

(14) ASSET DISPOSITIONS, ASSETS HELD FOR SALE AND ASSET IMPAIRMENTS

During the three months ending March 31, 2023, we sold or recycled five of our vessels held for sale, leaving three vessels valued at $0.7 million remaining in the held for sale account as of March 31, 2023. The total vessel and other sales for the three-month period ending March 31, 2023 contributed approximately $5.7 million in proceeds and we recognized a net $2.2 million gain on the dispositions. In the three-month period ending March 31, 2022, we sold five of our vessels held for sale, and re-activated one vessel from assets held for sale back into the active fleet.

We consider the valuation approach for our assets held for sale to be a Level 3 fair value measurement due to the level of estimation involved in valuing assets to be recycled or sold. We estimate the net realizable value of our assets held for sale using various methodologies including third party appraisals, sales comparisons, sales agreements and recycle yard tonnage prices. Estimates generally fall in ranges rather than exact numbers due to the nature of sales of offshore vessels and industry conditions. Our value ranges depend on our expectation of the ultimate disposition of the vessel. We will in all circumstances attempt to achieve maximum value for our vessels, but also recognize that certain vessels are more likely to be recycled, especially given the time and effort required to achieve a sale and the costs incurred to maintain a vessel while searching for a buyer. We establish ranges that in many cases have recycle value as the low end of the range and an expected open market sale value at the top of the range. When there is no expectation within the range that is considered more likely than any other, we apply equal probability weighting to the low and high ends of the valuation range. In addition, in conjunction with the reactivation of a vessel from assets held for sale to the active fleet in the first quarter of 2022 and the concurrent valuation of such vessel at its fair value, we recaptured $0.5 million of impairment charged to expense. We do not separate our asset impairment expense by segment because of the significant movement of our assets between segments.

The following table presents the activity in our asset held for sale account for the periods indicated:

(In Thousands, except number of vessels)	Three Months Ended
	Number of Vessels			March 31, 2023			Number of Vessels			March 31, 2022
Beginning balance		8		$	4,195			18		$	14,421
Sales		(5	)		(3,500	)		(5	)		(4,330	)
Transfers		—			—			(1	)		(1,500	)
Ending balance		3		$	695			12		$	8,591