Discontinued Operations

12 Months Ended

May. 31, 2015

Discontinued operations.

Discontinued Operations

2. Discontinued Operations

        On March 26, 2015, we completed the sale of our Telair Cargo Group to TransDigm, Inc. for $725 million, subject to certain post-closing adjustments, including a working capital adjustment. The Telair Cargo Group was comprised of Telair International, Telair US, and Nordisk Aviation Products. Cash received at closing before fees and expenses was $705 million with the remaining consideration of $20 million placed in escrow and payable based on the occurrence of certain post-closing events related to the A400M cargo system. In addition, incremental contingent consideration of up to $15 million related to the same cargo system development program could increase total proceeds to $740 million. We recognized a pre-tax gain on the sale (net of transaction expenses and fees) of $198.6 million in the fourth quarter of fiscal 2015. The gain excludes the aggregate $35 million of contingent consideration.

        We have also announced our intention to sell our Precision Systems Manufacturing ("PSM") business comprised of our metal and composite machined and fabricated parts manufacturing operations. During fiscal 2015, we recognized impairment charges of $57.5 million to reduce the carrying value of the PSM business's net assets to their expected value at the time of sale.

        Telair Cargo Group and PSM, which were both previously reported in our Technology Products segment, are reported as discontinued operations in the Consolidated Statements of Operations for all periods presented. Interest expense allocated to discontinued operations was $9.2 million, $13.0 million and $12.2 million for fiscal 2015, 2014, and 2013, respectively. No amounts for general corporate overhead were allocated to discontinued operations.

        Sales for our discontinued operations were $286.3 million, $325.9 million, and $329.4 million for fiscal 2015, 2014, and 2013, respectively. Liabilities of discontinued operations of $5.4 million at May 31, 2015 were classified as Accrued Liabilities on the Consolidated Balance Sheet.

        Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate to our continuing operations.