As a result of these events and cir cumstances, management performed an analysis of the general industr market conditions in the offshore platform rig business, and the pr ospectiv e market demand for the  offshore platform rigs owned by the Company. Based upon this  analysis, management determined that the carrying value of certain of the offshore rigs exceeded the estimated undiscounted future cash flows  associated with these assets. Accor dingly , an asset impairment charge As demonstrated by these financial tr ends, the Company’s offshore  platform business has continued to decline. During the first half of 2004, the Company believed that two new contracts obtained for work that commenced during the thir and fourth quarters and the increases in commodity prices were precursors to more bidding activity in the market. That anticipated increase in bid activity did not materialize and bidding opportunities were very lo during the third and fourth  quarters. Additionally oil and natural gas commodity prices reached ne historical highs during the Company’s fourth fiscal quarter, but there was no improvement in the mar ket for the Company’s offshore platform rigs and no indication from customers that new opportunities would be forthcoming in the for eseeable future. During this same three year period, industry platform rig utilization in the Company’s market declined from 72% during the first quarter of fiscal 2002, to 47% during the four th quarter of fiscal 2004. During this same period, utilization for the Company’s platform rigs fell from 100% (10 of 10) during the first quar ter 2002, to a low of 42% (five of 12) during the first and second quar ters of 2004. Although activity rose slightly during the third and fourth quarters of 2004, it is expected to drop back to five activ rigs during the first quarter of 2005. 04-HP-876_newMDA.qxd 12/15/04 3:04 PM Page 30 31