Business Segment Information

12 Months Ended

May 31, 2012

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 and aircraft component repair management services. 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 and modifications, engineering services, painting, and the repair, overhaul and exchange 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 requirements for a mobile and agile force, heavy-duty pallets and lightweight cargo containers for the commercial market, 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 segment is as follows:

	For the Year Ended May 31,
	2012		2011		2010
Net sales:
Aviation Supply Chain	$	588,406	$	465,108	$	405,955
Government and Defense Services		552,687		571,343		194,944
Maintenance, Repair and Overhaul		422,169		393,671		301,348
Structures and Systems		501,736		374,990		449,904
	$	2,064,998	$	1,805,112	$	1,352,151

	For the Year Ended May 31,
	2012		2011		2010
Gross profit:
Aviation Supply Chain	$	106,029	$	76,247	$	70,490
Government and Defense Services		78,635		105,538		42,304
Maintenance, Repair and Overhaul		55,488		55,871		38,206
Structures and Systems		78,405		69,400		92,519
	$	318,557	$	307,056	$	243,519

	May 31,
	2012		2011		2010
Total assets:
Aviation Supply Chain	$	628,434	$	533,315	$	546,067
Government and Defense Services		537,679		501,351		307,864
Maintenance, Repair and Overhaul		224,752		234,701		220,159
Structures and Systems		644,570		293,437		276,297
Corporate		160,218		140,923		149,794
	$	2,195,653	$	1,703,727	$	1,500,181

	For the Year Ended May 31,
	2012		2011		2010
Capital expenditures:
Aviation Supply Chain	$	4,894	$	2,714	$	3,965
Government and Defense Services		67,909		107,699		2,830
Maintenance, Repair and Overhaul		5,844		5,329		7,097
Structures and Systems		11,135		5,912		12,914
Corporate		1,436		3,225		2,049
	$	91,218	$	124,879	$	28,855

	For the Year Ended May 31,
	2012		2011		2010
Depreciation and amortization:
Aviation Supply Chain	$	15,580	$	12,126	$	13,472
Government and Defense Services		39,386		26,572		4,007
Maintenance, Repair and Overhaul		6,284		6,661		6,904
Structures and Systems		14,559		9,066		10,625
Corporate		4,524		4,871		3,922
	$	80,333	$	59,296	$	38,930

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

	For the Year Ended May 31,
	2012			2011			2010
Segment gross profit	$	318,557		$	307,056		$	243,519
Selling, general and administrative		(189,397	)		(182,694	)		(153,299	)
Gain on sale of product line		—			5,922			—
Earnings from joint ventures		1,542			3,344			112
(Loss) gain on extinguishment of debt		(664	)		97			893
Interest expense		(37,772	)		(30,667	)		(26,832	)
Interest income		1,243			349			945
Loss on sale of investments		—			—			(1,150	)
Income before provision for income taxes	$	93,509		$	103,407		$	64,188

        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,
	2012			2011			2010
Aviation Supply Chain	$	15,098		$	16,516		$	10,372
Government and Defense Services		517,531			524,129			162,575
Maintenance, Repair and Overhaul		29,482			31,538			34,179
Structures and Systems		326,378			320,883			400,222
	$	888,489		$	893,066		$	607,348
Percentage of total sales		43.0	%		49.5	%		44.9	%

Geographic Data

	May 31,
	2012		2011
Long-lived assets:
United States	$	882,400	$	777,791
Europe		248,370		11,830
Other		1,611		121
	$	1,132,381	$	789,742

        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 $435,663 (21.1% of total sales), $330,213 (18.3% of total sales) and $289,435 (21.4% of total sales) in fiscal 2012, 2011 and 2010, respectively.