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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
 For the transition period from _________________________ to _________________________
Commission file number: 001-36246
Civeo Corporation
(Exact name of registrant as specified in its charter)
British Columbia, Canada98-1253716
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
  
Three Allen Center, 333 Clay Street, Suite 4980,
77002
Houston, Texas
(Zip Code)
(Address of principal executive offices) 
(713) 510-2400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Shares, no par valueCVEONew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "accelerated filer," "large accelerated filer," "smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated Filer
 
Emerging Growth Company
 
   
Non-Accelerated Filer Smaller Reporting Company
 
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



YesNo

The Registrant had 14,250,180 common shares outstanding as of October 25, 2021.



CIVEO CORPORATION
INDEX
Page No.
Part I -- FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Financial Statements
Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020
Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020
Consolidated Balance Sheets – as of September 30, 2021 (unaudited) and December 31, 2020
Unaudited Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020
Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020
Notes to Unaudited Consolidated Financial Statements
Cautionary Statement Regarding Forward-Looking Statements
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.   Quantitative and Qualitative Disclosures About Market Risk
Item 4.   Controls and Procedures
Part II -- OTHER INFORMATION
Item 1.     Legal Proceedings
Item 1A.  Risk Factors
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.     Exhibits
(a) Index of Exhibits
Signature Page

3


PART I -- FINANCIAL INFORMATION
ITEM 1. Financial Statements

CIVEO CORPORATION
 
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
 
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
Revenues:    
Service and other$150,081 $136,523 $419,861 $375,928 
Rental4,581 3,217 12,185 13,261 
Product401 3,117 2,623 7,162 
 155,063 142,857 434,669 396,351 
Costs and expenses:
Service and other costs107,287 92,147 307,198 267,051 
Rental costs3,892 3,131 10,523 11,559 
Product costs251 2,156 1,521 5,270 
Selling, general and administrative expenses17,320 13,462 46,204 38,889 
Depreciation and amortization expense20,282 24,820 62,928 72,527 
Impairment expense  7,935 144,120 
Other operating expense 21 51 122 755 
149,053 135,767 436,431 540,171 
Operating income (loss)6,010 7,090 (1,762)(143,820)
Interest expense(3,166)(3,646)(9,929)(13,095)
Loss on extinguishment of debt(416)(383)(416)(383)
Interest income  2 20 
Other (expense) income364 4,542 6,066 17,209 
Income (loss) before income taxes2,792 7,603 (6,039)(140,069)
Income tax (expense) benefit(1,770)(180)(2,354)8,509 
Net income (loss)1,022 7,423 (8,393)(131,560)
Less: Net income attributable to noncontrolling interest478 434 534 914 
Net income (loss) attributable to Civeo Corporation544 6,989 (8,927)(132,474)
Less: Dividends attributable to Class A preferred shares482 472 1,440 1,411 
Net income (loss) attributable to Civeo common shareholders$62 $6,517 $(10,367)$(133,885)
Per Share Data (see Note 8) (1)
Basic net income (loss) per share attributable to Civeo Corporation common shareholders$0.00 $0.39 $(0.73)$(9.48)
Diluted net income (loss) per share attributable to Civeo Corporation common shareholders$0.00 $0.39 $(0.73)$(9.48)
Weighted average number of common shares outstanding:
Basic14,277 14,160 14,255 14,118 
Diluted14,361 14,212 14,255 14,118 
(1)Reflects our 1-for-12 reverse share split that became effective November 19, 2020. See Note 1 - Description of Business and Basis of Presentation to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.
The accompanying notes are an integral part of these financial statements.

4


CIVEO CORPORATION
 
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In Thousands)
 
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
Net income (loss)$1,022 $7,423 $(8,393)$(131,560)
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustment, net of zero taxes
(12,217)11,131 (15,417)(8,025)
Total other comprehensive income (loss), net of taxes(12,217)11,131 (15,417)(8,025)
Comprehensive income (loss)(11,195)18,554 (23,810)(139,585)
Less: Comprehensive (loss) income attributable to noncontrolling interest450 462 488 928 
Comprehensive (loss) income attributable to Civeo Corporation$(11,645)$18,092 $(24,298)$(140,513)
The accompanying notes are an integral part of these financial statements.

5


CIVEO CORPORATION
 
CONSOLIDATED BALANCE SHEETS
(In Thousands, Excluding Share Amounts)
 September 30, 2021December 31, 2020
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$4,948 $6,155 
Accounts receivable, net108,058 89,782 
Inventories6,089 6,181 
Prepaid expenses10,823 7,020 
Other current assets12,575 6,165 
Assets held for sale15,530 3,910 
Total current assets158,023 119,213 
Property, plant and equipment, net399,962 486,930 
Goodwill8,125 8,729 
Other intangible assets, net94,680 99,749 
Operating lease right-of-use assets19,265 22,606 
Other noncurrent assets3,987 3,626 
Total assets$684,042 $740,853 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$45,193 $42,056 
Accrued liabilities31,084 27,349 
Income taxes261 203 
Current portion of long-term debt30,473 34,585 
Deferred revenue24,219 6,812 
Other current liabilities5,718 5,760 
Total current liabilities136,948 116,765 
Long-term debt, less current maturities162,689 214,000 
Operating lease liabilities16,382 19,834 
Other noncurrent liabilities15,238 14,897 
Total liabilities331,257 365,496 
Commitments and contingencies (Note 11)
Shareholders’ Equity:
Preferred shares (Class A Series 1, no par value; 50,000,000 shares authorized, 9,042 shares issued and outstanding, respectively; aggregate liquidation preference of $96,953,917 and $95,514,031 as of September 30, 2021 and December 31, 2020)
61,456 60,016 
Common shares (no par value; 46,000,000 shares authorized, 14,628,404 shares and 14,478,878 shares issued, respectively, and 14,307,806 shares and 14,215,169 shares outstanding, respectively) (1)
  
Additional paid-in capital1,581,248 1,578,315 
Accumulated deficit(918,539)(907,727)
Common shares held in treasury at cost, 320,598 and 263,709 shares, respectively
(8,050)(6,930)
Accumulated other comprehensive loss(364,360)(348,989)
Total Civeo Corporation shareholders’ equity351,755 374,685 
Noncontrolling interest1,030 672 
Total shareholders’ equity352,785 375,357 
Total liabilities and shareholders’ equity$684,042 $740,853 
(1)Reflects our 1-for-12 reverse share split that became effective November 19, 2020. See Note 1 - Description of Business and Basis of Presentation to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.
The accompanying notes are an integral part of these financial statements.
6


CIVEO CORPORATION
 
UNAUDITED CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS’ EQUITY
(In Thousands)
 
Attributable to Civeo
Preferred
Shares
Common
Shares
AmountPar ValueAdditional
Paid-in
Capital
Accumulated
Deficit
Treasury
Shares
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interest
Total
Shareholders’
Equity
Balance, June 30, 2020$59,068 $ $1,575,788 $(911,992)$(6,930)$(382,315)$624 $334,243 
Net income (loss)— — — 6,989 — — 434 7,423 
Currency translation adjustment— — — — — 11,103 28 11,131 
Dividends paid— — — — — — (450)(450)
Dividends attributable to Class A preferred shares472 — — (472)— — — — 
Share-based compensation— — 1,265 — — — — 1,265 
Balance, September, 30, 2020$59,540 $ $1,577,053 $(905,475)$(6,930)$(371,212)$636 $353,612 
Balance, June 30, 2021$60,974 $ $1,580,213 $(918,156)$(8,050)$(352,171)$595 $363,405 
Net income (loss)— — — 544 — — 478 1,022 
Currency translation adjustment— — — — — (12,189)(28)(12,217)
Dividends paid— — — — — — (15)(15)
Dividends attributable to Class A preferred shares482 — — (482)— — — — 
Common shares repurchased— — — (445)— — — (445)
Share-based compensation— — 1,035 — — — — 1,035 
Balance, September 30, 2021$61,456 $ $1,581,248 $(918,539)$(8,050)$(364,360)$1,030 $352,785 
Balance, December 31, 2019$58,129 $ $1,572,249 $(771,590)$(5,472)$(363,173)$662 $490,805 
Net income (loss)— — — (132,474)— — 914 (131,560)
Currency translation adjustment— — — — — (8,039)14 (8,025)
Dividends paid— — — — — — (954)(954)
Dividends attributable to Class A preferred shares1,411 — — (1,411)— — — — 
Share-based compensation— — 4,804 — (1,458)— — 3,346 
Balance, September 30, 2020$59,540 $ $1,577,053 $(905,475)$(6,930)$(371,212)$636 $353,612 
Balance, December 31, 2020$60,016 $ $1,578,315 $(907,727)$(6,930)$(348,989)$672 $375,357 
Net income (loss)— — — (8,927)— — 534 (8,393)
Currency translation adjustment— — — — — (15,371)(46)(15,417)
Dividends paid— — — — — — (130)(130)
Dividends attributable to Class A preferred shares1,440 — — (1,440)— — — — 
Common shares repurchased— — — (445)— — — (445)
Share-based compensation— — 2,933 — (1,120)— — 1,813 
Balance, September 30, 2021$61,456 $ $1,581,248 $(918,539)$(8,050)$(364,360)$1,030 $352,785 
 Preferred
Shares
Common
Shares (in
thousands)(1)
Balance, December 31, 20209,042 14,215 
Share-based compensation 113 
Common shares repurchased (20)
Balance, September 30, 20219,042 14,308 
(1)Reflects our 1-for-12 reverse share split that became effective November 19, 2020. See Note 1 - Description of Business and Basis of Presentation to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.
The accompanying notes are an integral part of these financial statements.
7


CIVEO CORPORATION
 
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
 
Nine Months Ended
September 30,
 20212020
Cash flows from operating activities:  
Net loss$(8,393)$(131,560)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization62,928 72,527 
Impairment charges7,935 144,120 
Loss on extinguishment of debt416 383 
Deferred income tax expense (benefit)2,105 (8,941)
Non-cash compensation charge2,933 4,804 
Gains on disposals of assets(2,305)(2,581)
Provision for credit losses, net of recoveries155 45 
Other, net2,436 (2,730)
Changes in operating assets and liabilities:
Accounts receivable(21,516)5,355 
Inventories(193)194 
Accounts payable and accrued liabilities9,836 1,247 
Taxes payable61 51 
Other current and noncurrent assets and liabilities, net6,843 (2,239)
Net cash flows provided by operating activities63,241 80,675 
Cash flows from investing activities:
Capital expenditures(9,645)(6,244)
Proceeds from disposition of property, plant and equipment7,545 3,336 
Other, net 4,619 
Net cash flows provided by (used in) investing activities(2,100)1,711 
Cash flows from financing activities:
Revolving credit borrowings367,622 324,611 
Revolving credit repayments(305,148)(369,122)
Term loan repayments(117,595)(31,092)
Debt issuance costs(4,407)(2,583)
Repurchases of common shares(445) 
Taxes paid on vested shares(1,120)(1,458)
Net cash flows used in financing activities(61,093)(79,644)
Effect of exchange rate changes on cash(1,255)865 
Net change in cash and cash equivalents(1,207)3,607 
Cash and cash equivalents, beginning of period6,155 3,331 
Cash and cash equivalents, end of period$4,948 $6,938 
Non-cash financing activities:
Preferred dividends paid-in-kind$1,440 $1,411 
The accompanying notes are an integral part of these financial statements.

8

CIVEO CORPORATION
 
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS



1.DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
 
Description of the Business
 
We provide hospitality services to the natural resources industry in Canada, Australia and the U.S. We provide a full suite of hospitality services for our guests, including lodging, catering and food service, housekeeping and maintenance at accommodation facilities that we or our customers own. In many cases, we provide services that support the day-to-day operations of accommodation facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics. We also offer development activities for workforce accommodation facilities, including site selection, permitting, engineering and design, manufacturing management and site construction, along with providing hospitality services once the facility is constructed. We primarily operate in some of the world’s most active oil, metallurgical (met) coal, liquefied natural gas (LNG) and iron ore producing regions, and our customers include major and independent oil companies, mining companies, engineering companies and oilfield and mining service companies. We operate in three principal reportable business segments – Canada, Australia and the U.S.

Reverse Share Split

On November 19, 2020, we effected a reverse share split where each twelve issued and outstanding common shares were
converted into one common share. Our common shares began trading on a reverse share split adjusted basis on November 19, 2020. A total of 14,215,169 common shares were issued and outstanding immediately after the reverse share split. No fractional shares were outstanding following the reverse share split. In lieu of any fractional share, the aggregate number of common shares that a holder was entitled to was, if the fraction was less than half a common share, rounded down to the next closest whole number of common shares, and if the fraction was at least half of a common share, rounded up to one whole common share.

The reverse share split did not affect the number of authorized or issued and outstanding shares of our preferred shares. As a result of the reverse share split, the conversion price for the Company’s outstanding Class A Series 1 preferred shares (Series A preferred shares) was automatically increased to $39.60 for each Series A preferred share (previously it was $3.30 per Series A preferred share).

All authorized, issued and outstanding shares and per share amounts contained in the accompanying consolidated financial statements have been adjusted to reflect this reverse share split for all prior periods presented.
 
Basis of Presentation
 
Unless otherwise stated or the context otherwise indicates: (i) all references in these consolidated financial statements to “Civeo,” “us,” “our” or “we” refer to Civeo Corporation and its consolidated subsidiaries; and (ii) all references in this report to “dollars” or “$” are to U.S. dollars.
 
The accompanying unaudited consolidated financial statements of Civeo have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC) pertaining to interim financial information. Certain information in footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) has been condensed or omitted pursuant to those rules and regulations. The unaudited financial statements included in this report reflect all the adjustments, consisting of normal recurring adjustments, which Civeo considers necessary for a fair presentation of the results of operations for the interim periods covered and for the financial condition of Civeo at the date of the interim balance sheet. Results for the interim periods are not necessarily indicative of results for the full year.
 
The preparation of consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. If the underlying estimates and assumptions upon which the financial statements are based change in future periods, actual amounts may differ from those included in the accompanying consolidated financial statements.
 
9

CIVEO CORPORATION
 
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
The financial statements included in this report should be read in conjunction with our audited financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020.

2.RECENT ACCOUNTING PRONOUNCEMENTS
 
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the FASB), which are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards or other guidance updates, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption. 

In December 2019, the FASB issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in ASU 2019-12 remove certain exceptions to the general principles in Accounting Standards Codification (ASC) Topic 740. The amendments also clarify and amend existing guidance to improve consistent application. The amendments are effective for financial statements issued for reporting periods beginning after December 15, 2020 and interim periods within the reporting periods. The transition method (retrospective, modified retrospective or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied on a prospective basis. We adopted ASU 2019-12 on January 1, 2021 and have applied the prospective basis. The adoption of this new standard did not have an impact on our consolidated financial statements.

3.REVENUE
 
The following table disaggregates our revenue by our three reportable segments: Canada, Australia and the U.S., and major categories for the periods indicated (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
Canada    
Accommodation revenues$60,511 $49,798 $176,800 $156,068 
Mobile facility rental revenues19,075 13,135 38,240 21,715 
Food service and other services revenues4,471 8,852 14,183 26,336 
Total Canada revenues84,057 71,785 229,223 204,119 
Australia
Accommodation revenues$38,104 $39,470 $109,559 $106,988 
Food service and other services revenues27,014 25,215 79,215 63,881 
Total Australia revenues65,118 64,685 188,774 170,869 
U.S.
Accommodation revenues$1,812 $394 $4,189 $1,892 
Mobile facility rental revenues3,941 3,218 10,769 13,275 
Manufacturing revenues124 2,772 1,686 6,159 
Food service and other services revenues11 3 28 37 
Total U.S. revenues5,888 6,387 16,672 21,363 
Total revenues$155,063 $142,857 $434,669 $396,351 
 
Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when our performance obligations are satisfied is not significant. Payment terms are generally within 30 days and do not extend beyond 60 days, unless otherwise agreed to. We do not have significant financing components or significant payment terms.

As of September 30, 2021, for contracts that are greater than one year, the table below discloses the estimated revenues related to performance obligations that are unsatisfied (or partially unsatisfied) and when we expect to recognize the revenue. The table only includes revenue expected to be recognized from contracts where the quantity of service is certain (in thousands):
10

CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)

 For the years ending December 31,
 202120222023ThereafterTotal
Revenue expected to be recognized as of September 30, 2021$38,929 $97,897 $25,598 $7,188 $169,612 

We applied the practical expedient and do not disclose consideration for remaining performance obligations with an original expected duration of one year or less. In addition, we do not estimate revenues expected to be recognized related to unsatisfied performance obligations for contracts without minimum room commitments. The table above represents only a portion of our expected future consolidated revenues and it is not necessarily indicative of the expected trend in total revenues.

4.FAIR VALUE MEASUREMENTS
 
Our financial instruments consist of cash and cash equivalents, receivables, payables and debt instruments. We believe that the carrying values of these instruments on the accompanying consolidated balance sheets approximate their fair values.
 
As of September 30, 2021 and December 31, 2020, we believe the carrying value of our floating-rate debt outstanding under our term loans and revolving credit facilities approximates fair value because the terms include short-term interest rates and exclude penalties for prepayment. We estimated the fair value of our floating-rate term loan and revolving credit facilities using significant other observable inputs, representative of a Level 2 fair value measurement, including terms and credit spreads for these loans.
 
During the first quarter of 2020, we recorded goodwill impairment charges related to one of our reporting units. Our estimates of fair value required us to use significant unobservable inputs, representative of Level 3 fair value measurements, including numerous assumptions with respect to future circumstances that might directly impact each of the relevant asset groups’ operations in the future and are therefore uncertain. These assumptions with respect to future circumstances included future cash flows, oil, met coal and natural gas prices, anticipated spending by our customers, the cost of capital, and industry and/or local market conditions. We estimated the fair value when conducting the goodwill impairment test primarily using an income approach. The discount rates used to value our reporting units for the goodwill impairment test ranged between 10.5% and 14.0%.

During the second quarter of 2021 and the first quarter of 2020, we wrote down certain long-lived assets to fair value. During the first quarter of 2020, we estimated the fair value when conducting the long-lived asset impairment tests primarily using an income approach. We used a variety of unobservable inputs and underlying assumptions consistent with those discussed above for purposes of our goodwill impairment test. The discount rates used to value our Canadian and U.S. segments long-lived asset impairment analysis ranged between 11.0% and 14.0%. During the second quarter of 2021, our estimate of the fair value of undeveloped land positions in Australia that were impaired was based on appraisals from third parties.

See Note 6 – Impairment Charges for further information.

5.DETAILS OF SELECTED BALANCE SHEET ACCOUNTS
 
Additional information regarding selected balance sheet accounts at September 30, 2021 and December 31, 2020 is presented below (in thousands):
 
 September 30, 2021December 31, 2020
Accounts receivable, net:  
Trade$72,616 $66,071 
Unbilled revenue34,669 22,565 
Other1,156 1,421 
Total accounts receivable108,441 90,057 
Allowance for credit losses(383)(275)
Total accounts receivable, net$108,058 $89,782 

11

CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)

As of September 30, 2021 and December 31, 2020, Other accounts receivable included zero and $1.1 million, respectively, related to the Canada Emergency Wage Subsidy (CEWS), a subsidy implemented by the Canadian government in response to the COVID-19 pandemic. For the three months ended September 30, 2021 and 2020, Other income related to the CEWS was zero and $3.6 million, respectively. For the nine months ended September 30, 2021 and 2020, Other income related to the CEWS was $3.5 million and $9.7 million, respectively.
 September 30, 2021December 31, 2020
Inventories:  
Finished goods and purchased products$4,882 $5,047 
Work in process38 45 
Raw materials1,169 1,089 
Total inventories$6,089 $6,181 

 Estimated
Useful Life
(in years)
September 30, 2021December 31, 2020
Property, plant and equipment, net:     
Land   $30,328 $47,751 
Accommodations assets3151,658,053 1,737,620 
Buildings and leasehold improvements72024,024 28,831 
Machinery and equipment41513,492 12,784 
Office furniture and equipment3762,201 61,850 
Vehicles3514,199 15,363 
Construction in progress   4,542 5,523 
Total property, plant and equipment   1,806,839 1,909,722 
Accumulated depreciation   (1,406,877)(1,422,792)
Total property, plant and equipment, net   $399,962 $486,930 

 September 30, 2021December 31, 2020
Accrued liabilities:  
Accrued compensation$25,919 $22,475 
Accrued taxes, other than income taxes2,959 3,099 
Other2,206 1,775 
Total accrued liabilities$31,084 $27,349 
 
6.IMPAIRMENT CHARGES  
Quarter ended June 30, 2021. During the second quarter of 2021, we recorded impairment expense of $7.9 million related to various undeveloped land positions and related permitting costs in Australia. At June 30, 2021, we identified an impairment trigger related to certain of these properties due to the cancellation of a significant thermal coal project in Australia and our negative expectations related to other possible Australian thermal coal projects becoming viable in the near term. Accordingly, the assets were written down to their estimated fair value of $2.4 million. As of June 30, 2021, we concluded certain of the undeveloped land positions met the criteria to be classified as held for sale.
Quarter ended March 31, 2020. During the first quarter of 2020, we recorded impairment expense related to goodwill and long-lived assets.
The spread of the COVID-19 coronavirus (COVID-19) and the response thereto during the first quarter of 2020 negatively impacted the global economy. The resulting unprecedented decline in oil demand, coupled with disagreements between Saudi Arabia and Russia about production limits, resulted in a collapse of global oil prices in March 2020, thereby creating unprecedented downward pressure on stock prices in the energy industry, particularly small-cap companies with operations in the U.S. and Canada, such as Civeo. As a result, we experienced a sustained reduction of our share price during the first quarter of 2020. Our market capitalization implied an enterprise value which was significantly less than the sum of the estimated fair values of our reporting units, and we determined that an indicator of a goodwill impairment was present as of March 31, 2020. Accordingly, we performed an interim goodwill impairment test as of March 31, 2020, and the carrying
12

CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
amount of our Canadian reporting unit exceeded the reporting unit's fair value. Based on the results of the impairment test, we reduced the value of our goodwill in our Canadian reporting unit to zero and recognized impairment expense in the first quarter of 2020 of $93.6 million.
Furthermore, as a result of the decline in global oil prices and forecasts for a potentially protracted period of lower prices, as well as the goodwill impairment in our Canadian segment, we determined all asset groups within this segment had experienced a trigger that indicated that the carrying values might not be recoverable. Accordingly, we assessed the carrying value of each asset group to determine if it continued to be recoverable based on estimated future cash flows. Based on the assessment, the carrying values of certain asset groups were determined to not be fully recoverable, and we proceeded to compare the estimated fair value of these asset groups to their respective carrying values. As a result, certain asset groups were written down to their estimated fair values of $43.5 million and we recorded impairment expense of $38.1 million related to certain long-lived assets in our Canadian segment.
Also, as a result of the decline in global oil prices and forecasts for a potentially protracted period of lower prices, we reviewed all asset groups in our U.S. segment to determine if an indicator of impairment had occurred that would indicate that the carrying values of the asset groups in the segment might not be recoverable. We determined that certain asset groups within the segment had experienced an indicator of impairment, and thus we assessed the carrying values of our long-lived assets in the U.S. to determine if they continued to be recoverable based on estimated future cash flows. Based on the assessment, the carrying values of certain of our U.S. asset groups were determined to not be recoverable, and we proceeded to compare the estimated fair values of the asset groups to their respective carrying values. Accordingly, these assets were written down to their estimated fair values of $12.5 million. We recorded impairment expense of $12.4 million during the first quarter of 2020 related to our U.S. segment.

7.ASSETS HELD FOR SALE

During the third quarter of 2021, we committed to a plan to dispose of certain assets in our U.S. business segment, due to the risks associated with changing geographic and market needs. Accordingly, the assets met the criteria of held for sale and we have discontinued depreciation of the assets. Their estimated fair values less the costs to sell exceeded their carrying values as of September 30, 2021.

In addition, as of September 30, 2021, assets held for sale included various non-operational land holdings in Australia. These assets were recorded at the estimated fair value less costs to sell of approximately $2.1 million.
 
As of December 31, 2020, assets held for sale included $3.9 million related to our modular construction and manufacturing plant near Edmonton, Alberta, Canada. During the first quarter 2021, the manufacturing facility was sold.
 
The following table summarizes the carrying amount as of September 30, 2021 and December 31, 2020 of the assets classified as held for sale (in thousands):
 
September 30, 2021December 31, 2020
Assets held for sale:  
Property, plant and equipment, net$15,530 $3,910 
Total assets held for sale$15,530 $3,910 

8.EARNINGS PER SHARE
 
As previously disclosed in Note 1 - Description of Business and Basis of Presentation, a 1-for-12 reverse share split became effective on November 19, 2020 for all authorized, issued and outstanding shares of Civeo common shares. Accordingly, all share and per share amounts have been adjusted to reflect this reverse stock split for all prior periods presented.

We calculate basic and diluted earnings per share by applying the two-class method because we have participating securities in the form of Class A preferred shares. Participating securities are allocated a proportional share of net income determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities. We also apply the treasury stock method with respect to certain share-based awards in the calculation of diluted earnings per share, if dilutive.
13

CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)

The calculation of earnings per share attributable to Civeo common shareholders is presented below for the periods indicated (in thousands, except per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Numerator:
Net income (loss) attributable to Civeo common shareholders$62 $6,517 $(10,367)$(133,885)
Less: income allocated to participating securities(9)(944)  
Basic net income (loss) attributable to Civeo Corporation common shareholders$53 $5,573 $(10,367)$(133,885)
Add: undistributed income attributable to participating securities9 944   
Less: undistributed income reallocated to participating securities(9)(942)  
Diluted net income (loss) attributable to Civeo Corporation common shareholders$53 $5,575 $(10,367)$(133,885)
Denominator:
Weighted average shares outstanding - basic14,277 14,160 14,255