Annual report pursuant to Section 13 and 15(d)

PROPERTY, PLANT AND EQUIPMENT AND LEASED FACILITIES AND EQUIPMENT

v3.21.1
PROPERTY, PLANT AND EQUIPMENT AND LEASED FACILITIES AND EQUIPMENT
12 Months Ended
Dec. 31, 2020
Property Plant And Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT AND LEASED FACILITIES AND EQUIPMENT

4. PROPERTY, PLANT AND EQUIPMENT AND LEASED FACILITIES AND EQUIPMENT

Property, plant and equipment

Property, plant and equipment consisted of the following at December 31, 2020 and 2019 (in thousands):

 

 

 

Estimated

 

 

December 31,

 

 

 

Useful Life

 

 

2020

 

 

2019

 

 

 

(in Years)

 

 

 

 

 

 

 

 

 

Land

 

 

 

 

$

4,972

 

 

$

4,972

 

Buildings

 

 

25

 

 

 

36,581

 

 

 

35,580

 

Machinery and equipment

 

3 to 25

 

 

 

99,621

 

 

 

126,622

 

Furniture and fixtures

 

3 to 5

 

 

 

1,375

 

 

 

2,288

 

Transportation equipment

 

3 to 5

 

 

 

2,195

 

 

 

2,521

 

Improvements

 

 

15

 

 

 

38,934

 

 

 

40,377

 

Construction in progress

 

 

 

 

 

8,120

 

 

 

2,636

 

Total property, plant and equipment

 

 

 

 

 

 

191,798

 

 

 

214,996

 

Accumulated depreciation

 

 

 

 

 

 

(124,340

)

 

 

(144,512

)

Property, plant and equipment, net

 

 

 

 

 

$

67,458

 

 

$

70,484

 

 

Depreciation expense for 2020, 2019 and 2018 was $8.6 million, $9.6 million and $10.4 million, respectively. The decrease in depreciation expense for 2020 compared to 2019 was due to assets becoming fully depreciated and assets being impaired in the fourth quarter 2019. The decrease in depreciation expense for 2019 compared to 2018 was due to assets becoming fully depreciated.


 

Leased Facilities and Equipment

At December 31, 2020, our significant leases subject to long-term agreements were as follows:

 

Corporate office in Houston, Texas consisting of approximately 17,000 square feet of office space. The lease expires in May 2025.

 

Jennings Yard located near Jennings, Louisiana, consisting of a 180-acre yard on the west bank of the Mermentau River approximately 25 miles north of the U.S. Intracoastal Waterway.  The lease expires in January 2025 with two ten-year renewal options that would extend the lease through January 2045.  During the fourth quarter 2020, we closed our Jennings Yard and do not intend to exercise our renewal options. See Note 3 for discussion of our closure of the Jennings Yard.

 

Lake Charles Yard located near Lake Charles, Louisiana, consisting of a 10-acre yard on the Calcasieu River approximately 17 miles from the GOM, that we sublease from a third party. The sublease expires in July 2023 with three, five-year renewal options (subject to sublessor renewals) that would extend the lease through July 2038. During the fourth quarter 2020, we closed our Lake Charles Yard and do not intend to exercise our renewal options. See Note 3 for discussion of our closure of the Lake Charles Yard.

 

Engineering office in Metairie, Louisiana, consisting of approximately 7,600 square feet of office space. The lease expires in December 2025.

At December 31, 2020, our lease asset, current lease liability and long-term lease liability were $1.7 million, $0.6 million and $2.0 million, respectively.  As discussed above, we do not intend to exercise the renewal options for our Jennings Yard and Lake Charles Yard, and accordingly, our lease obligations for these facilities exclude the lease renewal options.  See Note 3 for discussion of our lease asset impairments recorded during 2020 and 2019.

Future minimum payments under leases having initial terms of more than twelve months are as follows (in thousands):

 

 

 

Minimum

Payments

 

2021

 

$

726

 

2022

 

 

737

 

2023

 

 

653

 

2024

 

 

564

 

2025

 

 

219

 

Total lease payments

 

 

2,899

 

Less: interest

 

 

(278

)

Present value of lease liabilities

 

$

2,621

 

 

Total lease expense for our leased facilities and equipment, which includes lease asset amortization expense and expense for leases with original terms that are twelve months or less, for 2020, 2019 and 2018, was $1.5 million, $1.8 million and $1.9 million, respectively.  Cash paid for interest and lease expense for 2020 and 2019 was $1.8 million and $2.0 million, respectively.

The discount rate used to determine the present value of our lease liabilities was based on the interest rate on our LC Facility adjusted for terms similar to that of our leased properties. At December 31, 2020, our weighted-average remaining lease term was approximately 4.0 years and the weighted-average discount rate used to derive our lease liability was 6.7%.