Discontinued Operations

9 Months Ended

Feb. 28, 2015

Discontinued operations

Discontinued Operations

Note 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 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 a cargo system development program. ln 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 expect to report a pre-tax gain on the sale (net of transaction expenses and fees) of approximately $200 million in the fourth quarter of fiscal 2015.

We have also announced our intention to sell our Precision Systems Manufacturing business comprised of our metal and composite machined and fabricated parts manufacturing operations.  During the three months ended February 28. 2015, we recognized an impairment charge of $46.4 million to reduce the carrying value of Precision Systems Manufacturing business’s net assets to their expected value at the time of sale.

The Telair Cargo Group and Precision Systems Manufacturing, which were both previously reported in our Technology Products segment, are reported as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. lnterest expense allocated to discontinued operations was $2.8 million and $3.3 million during the three months ended February 28, 2015 and 2014, respectively, and $8.4 million and $10.0 million during the nine months ended February 28, 2015 and 2014, respectively. No amounts for general corporate overhead were allocated to discontinued operations.  The assets and liabilities of these businesses have been reclassified to Assets of discontinued operations and Liabilities of discontinued operations on the Condensed Consolidated Balance Sheets.

Sales for our discontinued operations were $91.8 million and $74.6 million during the three months ended February 28, 2015 and 2014, respectively, and $252.6 million and $241.1 million during the nine months ended February 28, 2015 and 2014, respectively.

The assets and liabilities held for sale related to discontinued operations on the Consolidated Balance Sheet as of February 28, 2015 are as follows:

Accounts receivable, net	$	73.2
Inventory	109.1
Property, plant and equipment, net	41.8
Goodwill	119.6
Intangible assets, net	98.9
Capitalized program development costs	114.9
Other assets	18.2
Total assets	575.7
Less: Reserve for assets held for sale	(46.4		)
	$	529.3
Accounts payable	$	23.1
Accrued liabilities	34.2
	$	57.3

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