Related Party Transactions

9 Months Ended

Oct. 31, 2016

Related Party Transactions

Related Party Transactions

Note 6. Related Party Transactions

On December 17, 2014, B/E Aerospace, Inc. ( “B/E Aerospace”) created an independent public company through a spin-off of its ASG and Energy Services Group (“ESG”) businesses to B/E Aerospace’s stockholders (“Spin-Off”).  Following the Spin-Off, the Company created in-house substantially all of the functions that were previously provided to it by B/E Aerospace. In addition, the Company has entered into certain agreements with B/E Aerospace relating to transition services and IT services for a transitional period of approximately 24 months following the Spin-Off. In addition, the Company entered into an employee matters agreement and a tax sharing and indemnification agreement with B/E Aerospace in connection with the Spin-Off. This transitional support enables KLX to establish its stand-alone processes for various activities that were previously provided by B/E Aerospace and does not constitute significant continuing support of KLX’s operations. Expenses incurred under those agreements totaled $2.1 and $2.7 for the three months ended October 31, 2016 and 2015, respectively, and $7.1 and $8.8 for the nine months ended October 31, 2016 and 2015, respectively. As of October 31, 2016, the Company has recorded a tax indemnity payable to B/E Aerospace totaling $4.7, of which $0.1 is classified in other current liabilities and $4.6 is classified in other long term liabilities.

Sales to B/E Aerospace were $5.4 and $5.1 for the three months ended October 31, 2016 and 2015, respectively, and $18.6 and $14.4 for the nine months ended October 31, 2016 and 2015, respectively.