Property Plant and Equipment
|12 Months Ended|
Dec. 31, 2017
|Property, Plant and Equipment [Abstract]|
|Property, Plant and Equipment||
Property, Plant and Equipment
The components of our property, plant and equipment balance are as follows:
Depreciation expense was $119.6 million, $136.3 million and $151.9 million for the years ended December 31, 2017, 2016, and 2015, respectively.
Provision for Reduction in Carrying Value of an Asset
Asset impairment evaluations are, by nature, highly subjective. They involve expectations about future cash flows generated by our assets and reflect management’s assumptions and judgments regarding future industry conditions and their effect on future utilization levels, dayrates and costs. The use of different estimates and assumptions could result in materially different carrying values of our assets. We review the carrying amounts of long-lived assets for potential impairment when events occur, or circumstances change, which indicate the carrying values of such assets may not be recoverable.
Although no impairment of our asset groups was identified during the year ended December 31, 2017, we recorded a provision of $1.9 million for reduction in carrying value of assets. This provision was related to certain assets in the International & Alaska Drilling segment that were deemed to be excess and functionally obsolete unless significant costs were incurred to refurbish them.
Disposition of Assets
During the normal course of operations, we periodically sell equipment deemed to be excess, obsolete, or not currently required for operations. Net losses recorded on asset disposition were $2.9 million and $1.6 million for the years ended December 31, 2017 and December 31, 2016, respectively. The net loss for 2017 was primarily related to the sale of one rig located in Papua New Guinea. Activity in both periods included equipment retirements.
The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.
Reference 1: http://www.xbrl.org/2003/role/presentationRef