ASSETS HELD FOR SALE |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ASSETS HELD FOR SALE |
ASSETS HELD FOR SALE
South Texas Properties:
On April 20, 2018, we closed the sale of our Texas South Yard for a sale price of $55.0 million, less selling costs of $1.5 million. We received approximately $52.7 million at closing which was in addition to the $0.8 million of previously received earnest money. The net proceeds received rebuilt our liquidity, which provided support for projects, our ontinued investment in our EPC Division and for other general corporate purposes. We recognized a gain of approximately $3.9 million from the sale during the second quarter of 2018; however, we do not anticipate any material cash tax liability given our NOLs.
Our Texas North Yard represents excess capacity within our Fabrication Division. We continue to market our Texas North Yard with interested parties and hope to have a negotiated contract for the sale of our Texas North Yard in the near future.
We do not expect the sale of these assets to impact in any respect our ability to operate our Fabrication Division. The sale of our South Texas Properties does not qualify for discontinued operations presentation as we continue to operate our Fabrication Division at other facilities.
Hurricane Harvey Insurance Recoveries:
On August 25, 2017, buildings and equipment located at our South Texas Properties were damaged by Hurricane Harvey which made landfall as a Category 4 hurricane. On June 28, 2018, we agreed to a global settlement with our insurance carriers in the amount of $15.4 million. As of June 30, 2018, we had received payments totaling $8.2 million and the remaining $7.2 million has been recorded as an insurance receivable on our Consolidated Balance Sheet as of June 30, 2018, and represents a non-cash change within our Consolidated Statement of Cash Flows related to our insurance receivable. As of the date of this Report, we have received payment for the full settlement amount.
In applying the settlement, we allocated the claim amounts less agreed upon deductibles to the respective groups of assets and reimbursement of costs incurred included in our settlement agreement as follows:
During the second quarter of 2018, we recorded an impairment of $0.6 million primarily related to a piece of equipment that we sold during July 2018. During the three months ended March 31, 2018, we recorded an impairment of $0.8 million related to a piece of equipment at our Texas North Yard that we intend to sell at auction. The impairments were calculated as their net book values less management's estimated net proceeds from the sales.
Shipyard Division Assets:
Our Shipyard Division assets held for sale at June 30, 2018, primarily consist of a 2,500-ton drydock located at our Houma Shipyard. During the first quarter of 2017, management placed the assets at our former Prospect Shipyard for sale, and we recorded an impairment of $0.4 million related to those assets based upon their estimated sale price. During the second quarter of 2017, we sold two drydocks for proceeds of $2.0 million and recorded a loss on sale of $0.3 million. During the fourth quarter of 2017, we recorded an additional impairment of $0.6 million in connection with our termination of the former Prospect Shipyard lease. Our net book value of property, plant and equipment for these assets was $1.9 million at June 30, 2018. Our shipyard assets held for sale do not qualify for discontinued operations presentation.
A summary of the assets included in assets held for sale as of June 30, 2018, including our Texas North Yard and the Shipyard Division assets is as follows (in thousands):
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