TIDEWATER INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended March 31, 2010, 2009, and 2008  Maintenance and repairs are expensed as incurred during the asset's original estimated useful life (its  original depreciable life). Major repair costs incurred after the original estimated depreciable life that also  have the effect of extending the useful life of the asset are capitalized and amortized over 30 months.  Vessel modifications that are performed for a specific customer contract are capitalized and amortized over  the firm contract term. Major modifications to equipment are capitalized and amortized over the remaining  life of the equipment. The majority of the company’s vessels require drydocking inspection twice in each five  year period, and the company schedules vessel drydockings when it is anticipated that the work can be  performed. The following is a summary of net properties and equipment at March 31, 2010 and 2009: The company considers a vessel to be stacked if its crew is removed from the vessel and limited  maintenance is being performed on the vessel. This action is taken to reduce operating costs when  management does not foresee adequate marketing possibilities in the near future. Vessels are added to this  list when market conditions warrant, and they are removed from this list when sold or otherwise disposed of  or when returned to active service. As economically practical opportunities arise to use the vessels to  provide marine services, the stacked vessels can be returned to service by performing any necessary  maintenance on the vessel and returning fleet personnel to operate the vessel. Although not currently  fulfilling charters, stacked vessels are considered to be in service and are included in the calculation of the  company’s utilization statistics. Stacked vessels at March 31, 2010 and 2009 have an average age of  28.3 and 28.0 years, respectively. The vast majority of vessels stacked at March 31, 2010 are currently  being marketed for sale and are not expected to return to the active fleet, primarily due to their mature age. Vessels withdrawn from service represent those vessels which management has determined are unlikely to  return to active service and are currently marketed for sale. Vessels withdrawn from service are not included  in the company’s utilization statistics. Vessels withdrawn from service at March 31, 2010 and 2009 have an  average age of 31.1 and 29.7 years, respectively.  All vessels are classified in the company’s consolidated balance sheets in Properties and Equipment. No  vessels are classified as held for sale because no vessel meets the criteria. Stacked vessels and vessels  withdrawn from service are reviewed for impairment semiannually . The company reviews long-lived assets for impairment whenever events occur or changes in circumstances  indicate that the carrying amount of assets may not be recoverable. In such evaluation, the estimated future  undiscounted cash flows generated by an asset group are compared with the carrying amount of the asset  group to determine if a write-down may be required. The company estimates cash flows based upon  historical data adjusted for the company’s best estimate of future market performance that is based on  industry trends. If impairment exists, the carrying value of the asset group is reduced to its estimated fair  value. Vessels with similar operating and marketing characteristics, including stacked vessels that have not  been withdrawn from service, are grouped for asset impairment testing. Although the company believes its assumptions and estimates are reasonable, material deviations from the  assumptions and estimates could produce a materially different result. Management estimates may vary  considerably from actual outcomes due to future adverse market conditions or poor operating results that  F-10 Valuation of Long-Lived Assets  2010 2009 Number  Carrying Number Carrying Of Vessels  Value  Of Vessels  Value  (In thousands)  (In thousands)  Vessels in active service  282  1,891,322  342  $ 1,549,118  Stacked vessels  83  47,959  61  18,436  Vessels withdrawn from service  7  440  11  1,340  Marine equipment under construction  275,578  403,253  Other property and equipment  38,525  41,178  Totals 372 2,253,824 414 $ 2,013,325