3. LONG-LIVED ASSETS AND LEASED FACILITIES AND EQUIPMENT

Property, plant and equipment

Depreciation expense for 2023 and 2022 was $4.9 million and $4.7 million, respectively.

In February 2024, we sold certain property of our Fabrication Division that was part of our Houma Facilities for $8.5 million (net of transaction and other costs). The property sold was classified as an asset held for sale (“Houma AHFS”) on our Balance Sheet at December 31, 2023, and its carrying value was $5.6 million, which was less than its fair value based on the proceeds from its sale.

Leased Facilities and Equipment

We lease certain office, warehouse and operating facilities under long-term lease arrangements that expire at various dates through October 2027, some of which include renewal options ranging from one to 20 years. At December 31, 2023, our lease asset, current lease liability and long-term lease liability were $0.7 million, $0.8 million and $0.5 million, respectively. Our lease obligations include any renewal options that we intend to exercise. Future minimum payments under leases having initial terms of more than twelve months are as follows (in thousands):

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 2023 and 2022, was $1.7 million and $1.6 million, respectively. Cash paid for leases for 2023 and 2022 was $2.0 million and $2.0 million, respectively. Certain of our leases are subject to subleases with third parties. Sublease income for 2023 and 2022 was $0.6 million and $0.4 million, respectively, and is included in other (income) expense, net on our Statement of Operations.

During 2022, we sold a purchase option for $1.9 million (net of transaction and other costs) that was entered into in connection with a previous acquisition that provided us with a right to buy a leased fabrication and operating facility for a nominal amount. No material gain or loss was recognized on the sale of the purchase option as the net proceeds approximated the carrying value of the underlying right-of-use asset associated with the leased facility. The net proceeds are included in proceeds from sale of property and equipment on our Statement of Cash Flows.

Goodwill and Other Intangible Assets

Goodwill – As discussed in Note 1, goodwill is not amortized, but instead is reviewed for impairment at least annually at a reporting unit level, absent indicators of impairment or when other actions require an impairment assessment (such as a change in reporting units). We perform our annual impairment assessment during the fourth quarter of each year based on balances as of October 1. At October 1, 2023, our Services Division represented our only reporting unit. During 2023, we had no indicators of impairment and had no changes to our reporting unit. We performed a qualitative assessment of our goodwill, and determined that it was not more likely than not that the fair value of our reporting unit was less than its carrying value. Accordingly, a quantitative assessment was not deemed necessary.

Other Intangible Assets – Other intangible assets were derived from the estimated fair value of existing underlying customer relationships associated with a previous acquisition and consisted of the following at December 31, 2023 and 2022 (in thousands):

Our intangible assets have estimated lives of seven years and amortization expense for 2023 and 2022 was $0.1 million and $0.1 million, respectively. Amortization expense is estimated to be $0.1 million to $0.2 million for each of 2024, 2025, 2026, 2027 and 2028.