Business Segment Information

12 Months Ended

May 31, 2011

Business Segment Information

Business Segment Information

15. Business Segment Information

Segment Reporting

        We report our activities in four business segments: Aviation Supply Chain; Government and Defense Services; Maintenance, Repair and Overhaul; and Structures and Systems.

        Sales in the Aviation Supply Chain segment are derived from the sale and lease of a wide variety of new, overhauled and repaired engine and airframe parts and components principally to the commercial aviation market. We also offer customized inventory supply chain management programs. Sales also include the sale and lease of commercial aircraft and jet engines and technical and advisory services. Cost of sales consists principally of the cost of product, direct labor, overhead (primarily indirect labor, facility cost and insurance) and the cost of lease revenue (primarily depreciation and insurance).

        Sales in the Government and Defense Services segment are derived from the sale of new and overhauled engine and airframe parts and components, customized performance based logistics programs, expeditionary airlift services, aircraft modifications and engineering, design, and integration services to our government and defense customers. Cost of sales consists principally of the cost of the product (primarily aircraft and engine parts), direct labor, overhead and aircraft maintenance costs.

        Sales in the Maintenance, Repair and Overhaul segment are principally derived from aircraft maintenance, including painting, and the repair and overhaul of landing gear. Cost of sales consists principally of the cost of product (primarily replacement aircraft parts), direct labor and overhead.

        Sales in the Structures and Systems segment are derived from the engineering, design and manufacture of containers, pallets and shelters used to support the U.S. military's tactical deployment requirements, complex machined and fabricated parts, components and sub-systems for various aerospace and defense programs and other applications, in-plane cargo loading and handling systems for commercial and military applications and composite products for aviation and industrial use. Cost of sales consists principally of the cost of product, direct labor and overhead.

        The accounting policies for the segments are the same as those described in Note 1. Our chief operating decision making officer (Chief Executive Officer) evaluates performance based on the reportable segments and utilizes gross profit as a primary profitability measure. The expenses and assets related to corporate activities are not allocated to the segments. Our reportable segments are aligned principally around differences in products and services.

        Gross profit is calculated by subtracting cost of sales from sales. Selected financial information for each reportable segment is as follows:

		For the Year Ended May 31,
		2011		2010		2009
Net sales:
	Aviation Supply Chain	$	435,778	$	370,220	$	424,638
	Government and Defense Services		571,343		194,944		174,391
	Maintenance, Repair and Overhaul		393,671		301,348		348,810
	Structures and Systems		374,990		449,904		432,690
		$	1,775,782	$	1,316,416	$	1,380,529

		For the Year Ended May 31,
		2011		2010		2009
Gross profit:
	Aviation Supply Chain	$	72,251	$	67,321	$	79,332
	Government and Defense Services		105,538		42,304		39,507
	Maintenance, Repair and Overhaul		55,871		38,206		51,281
	Structures and Systems		69,400		92,519		66,584
		$	303,060	$	240,350	$	236,704

		May 31,
		2011		2010		2009
Total assets:
	Aviation Supply Chain	$	533,315	$	546,067	$	634,307
	Government and Defense Services		501,351		307,864		67,618
	Maintenance, Repair and Overhaul		234,701		220,159		221,070
	Structures and Systems		293,437		276,297		281,410
	Corporate		140,923		149,794		171,500
		$	1,703,727	$	1,500,181	$	1,375,905

		For the Year Ended May 31,
		2011		2010		2009
Capital expenditures:
	Aviation Supply Chain	$	2,714	$	3,965	$	3,055
	Government and Defense Services		107,699		2,830		381
	Maintenance, Repair and Overhaul		5,329		7,097		6,391
	Structures and Systems		5,912		12,914		15,906
	Corporate		3,225		2,049		1,802
		$	124,879	$	28,855	$	27,535

		For the Year Ended May 31,
		2011		2010		2009
Depreciation and amortization:
	Aviation Supply Chain	$	12,126	$	13,472	$	18,194
	Government and Defense Services		26,572		4,007		1,092
	Maintenance, Repair and Overhaul		6,661		6,904		6,531
	Structures and Systems		9,066		10,625		10,286
	Corporate		4,871		3,922		3,991
		$	59,296	$	38,930	$	40,094

        The following table reconciles segment gross profit to consolidated income from continuing operations before provision for income taxes.

		For the Year Ended May 31,
		2011			2010			2009
Segment gross profit		$	303,060		$	240,350		$	236,704
	Selling, general and administrative		(173,599	)		(146,693	)		(138,588	)
	Gain on sale of product line		5,922			—			—
	Earnings from joint ventures		3,344			112			8,496
	Gain on extinguishment of debt		97			893			14,701
	Interest expense		(30,670	)		(26,831	)		(31,408	)
	Interest income		349			945			1,465
	Loss on sale of investments		—			(1,150	)		(1,393	)
Income from continuing operations before provision for income taxes		$	108,503		$	67,626		$	89,977

        No single non-government customer represents 10% or more of total sales in any of the last three fiscal years. Sales to the U.S. Department of Defense, other U.S. government agencies and their contractors by segment are as follows:

	For the Year Ended May 31,
	2011			2010			2009
Aviation Supply Chain	$	16,467		$	10,372		$	8,997
Government and Defense Services		524,129			162,575			125,885
Maintenance, Repair and Overhaul		31,538			34,179			36,453
Structures and Systems		320,883			400,222			361,574
	$	893,017		$	607,348		$	532,909
Percentage of total sales		50.3	%		46.1	%		38.6	%

Geographic Data

		May 31,
		2011		2010
Long-lived assets:
	United States	$	777,791	$	647,440
	Europe		11,830		6,252
	Other		121		158
		$	789,742	$	653,850

        Sales to unaffiliated customers in foreign countries, the majority of which are located in Europe, the Middle East, Canada, Mexico, South America and Asia (including sales through foreign sales offices of domestic subsidiaries), were approximately $308,585 (17.4% of total sales), $264,829 (20.1% of total sales) and $277,067 (20.1% of total sales) in fiscal 2011, 2010 and 2009, respectively.