Asset Impairments

6 Months Ended

Nov. 30, 2017

Asset Impairments

Asset Impairments

Note 4 — Asset Impairments

Our Contractor-Owned, Contractor-Operated (“COCO”) business included in our Expeditionary Services segment completed certain contracts in the second quarter of fiscal 2018.  As the aircraft supporting these contracts have not been placed onto new contracts and coupled with the continued decline in operational tempo within the U.S. Department of Defense (“DoD”) and an excess supply of aircraft assets in the market, we determined there was an impairment triggering event in the period and tested the recoverability of our COCO aircraft, rotable assets, support parts, and related assets.  In the three-month period ended November 30, 2017, we recognized impairment and other charges of $54.2 million including aircraft impairment of $14.5 million, inventory reserves of $21.2 million, rotable asset impairment of $15.9 million, and other impairment charges of $2.6 million.  The fair value of the aircraft and related assets was based on available market data for similar assets and is classified as Level 3 in the fair value hierarchy..

As a result of the triggering events discussed above, we also performed an interim goodwill impairment test of our Airlift reporting unit in the second quarter of fiscal 2018.  The fair value of the Airlift reporting unit exceeded its carrying value, and as a result, no goodwill impairment charges were recognized.