Discontinued Operations

9 Months Ended

Feb. 28, 2017

Discontinued Operations

Discontinued Operations

Note 2 — Discontinued Operations

On March 26, 2015, we completed the sale of our Telair Cargo Group to TransDigm, Inc.  The Telair Cargo Group was comprised of Telair International, Telair US, and Nordisk Aviation Products.  Cash received at closing in the fourth quarter of fiscal 2015 before fees and expenses was $705 million.  The sale also allowed for contingent consideration of up to $35 million based on the occurrence of certain post-closing events related to the A400M cargo system.  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.

In the first quarter of fiscal 2016, we recognized a gain of $27.7 million net of expenses representing the resolution of the contingent consideration related to the A400M cargo system.

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

During the first quarter of fiscal 2017, we decided to retain our composite manufacturing operations within our Expeditionary Services segment as a product line within our mobility products business.  As a result, we reclassified our composite manufacturing operations into continuing operations for all periods presented.  Also during the first quarter of fiscal 2017, we decided to shut down the metal machining operation which had been available for sale.  The shutdown of the metal machining operation was completed prior to the end of the first quarter.

Telair Cargo Group and PSM’s metal machining operation are reported as discontinued operations in the Condensed Consolidated Statements of Income for all periods presented.  No amounts for general corporate overhead or interest expense were allocated to discontinued operations during the periods presented.

Assets of discontinued operations of $0.1 million and $4.0 million at February 28, 2017 and May 31, 2016, respectively, were classified as Deposits, prepaids, and other on the Condensed Consolidated Balance Sheet.  Liabilities of discontinued operations of $7.7 million and $12.5 million at February 28, 2017 and May 31, 2016, respectively, were classified as Accrued Liabilities on the Condensed Consolidated Balance Sheet.  Operating income from discontinued operations for the three and nine month periods ended February 28, 2017 and February 29, 2016 was comprised of the following:

	Three Months Ended						Nine Months Ended
	February 28/29,						February 28/29,
	2017			2016			2017			2016
Sales	$	—		$	3.5		$	0.6		$	8.6
Cost of sales	—			(3.8		)	(1.0		)	(13.0		)
Selling, general and administrative expenses	(0.1		)	(1.0		)	(0.3		)	(2.9		)
Operating loss from discontinued operations	$	(0.1	)	$	(1.3	)	$	(0.7	)	$	(7.3	)

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