Commitments and Contingencies

12 Months Ended

May 31, 2017

11. Commitments and Contingencies

On October 3, 2003, we entered into a sale-leaseback transaction whereby we sold and leased back a facility located in Garden City, New York. The lease is classified as an operating lease. Net proceeds from the sale of the facility were $14.0 million and the cost and related accumulated depreciation of the facility of $9.5 million and $4.6 million, respectively, were removed from the Consolidated Balance Sheet at the time of sale. The gain realized on the sale of $9.1 million has been deferred and is being amortized over the 20-year lease term. As of May 31, 2017 and 2016, the unamortized balance of the deferred gain was approximately $2.9 million and $3.4 million, respectively, and is included in Other liabilities and deferred income on the Consolidated Balance Sheet.

During the fourth quarter of fiscal 2015, we entered into a sale-leaseback transaction for our two S-92 rotary-wing aircraft resulting in the recognition of a loss of $1.1 million. We received sales proceeds of $40.3 million in fiscal 2015 which were deferred as a sale-leaseback advance pending completion of the sale transactions. Both of the S-92 aircraft sales were completed in fiscal 2016 and the related leases ended in fiscal 2017.

During fiscal 2016, we received proceeds of $38.5 million from sale-leaseback transactions for two AW-189 rotary-wing aircraft which are supporting search and rescue operations in the Falkland Islands. The $1.7 million gain realized on the sale was deferred and is being amortized over the lease term of ten years.

In addition to the leases described above, we lease other facilities and equipment under agreements that are classified as operating leases that expire at various dates through 2034. Future minimum payments under all operating leases at May 31, 2017 are as follows:

2018	$	24.0
2019		18.1
2020		16.5
2021		14.4
2022		13.5
2023 and thereafter		40.0

Rental expense for facilities and equipment during fiscal years 2017, 2016, and 2015 was $31.9 million, $33.5 million, and $33.7 million, respectively.

We enter into purchase obligations which arise in the ordinary course of business and represent a binding commitment to acquire inventory, including raw materials, parts and components, as well as equipment to support the operations of our business. The aggregate amount of purchase obligations due in each of the next five fiscal years is $231.2 million in 2018, $37.7 million in 2019, $1.4 million in 2020, $2.7 million in 2021 and none in 2022.

We routinely issue letters of credit and performance bonds in the ordinary course of our business. These instruments are typically issued in conjunction with insurance contracts or other business requirements. The total of these instruments outstanding at May 31, 2017 was approximately $13.6 million.

We are involved in various claims and legal actions, including environmental matters, arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial condition or results of operations.