Discontinued Operations

6 Months Ended

Nov. 30, 2019

Discontinued Operations

Discontinued Operations

Note 2 – Discontinued Operations

During the third quarter of fiscal 2018, we decided to pursue the sale of our Contractor-Owned, Contractor-Operated (“COCO”) business previously included in our Expeditionary Services segment. Due to this strategic shift, the assets, liabilities, and results of operations of our COCO business have been reported as discontinued operations for all periods presented.

During fiscal 2019, we signed an agreement to sell our U.S. Department of Defense ("DoD") contracts and certain assets of our COCO business. In conjunction with this agreement and other expected asset sales, we recognized an impairment charge in discontinued operations of $74.1 million during the third quarter of fiscal 2019 reflecting the expected net proceeds to be received upon the completion of the sale transactions. In fiscal 2020, we signed an agreement to sell the remaining operating contract of the COCO business and recognized an impairment charge of $11.8 million in the first quarter of fiscal 2020 related to the disposal of the remaining COCO assets. The sale of the DoD contracts and related assets was completed in the second quarter of fiscal 2020 and we expect the sale of the remaining operating contract to be completed shortly after government approval which we expect to receive before the end of fiscal 2020.

No amounts for general corporate overhead or interest expense were allocated to discontinued operations during the periods presented. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate to our continuing operations.

Operating results for discontinued operations were comprised of the following:

	Three Months Ended				Six Months Ended
	November 30,				November 30,
	2019		2018		2019		2018
Sales	$	17.3	$	22.2	$	33.9	$	42.2
Cost of sales		(18.8)		(25.4)		(38.4)		(47.7)
Asset impairment		—		—		(11.8)		—
Selling, general and administrative expenses		(5.4)		(2.3)		(7.2)		(4.8)
Operating loss from discontinued operations		(6.9)		(5.5)		(23.5)		(10.3)
Provision for income taxes (benefit)		(1.0)		(1.3)		(4.9)		(2.3)
Loss from discontinued operations	$	(5.9)	$	(4.2)	$	(18.6)	$	(8.0)

The carrying amounts of the major classes of assets and liabilities for our discontinued operations are as follows:

	November 30,		May 31,
	2019		2019
Accounts receivable, net	$	3.1	$	16.2
Inventory, rotable assets, and equipment		—		7.5
Operating lease ROU assets		22.8		—
Other assets		1.5		5.5
Assets of discontinued operations	$	27.4	$	29.2
Accounts payable and accrued liabilities	$	18.7	$	29.2
Operating lease liabilities		23.2		—
Liabilities of discontinued operations	$	41.9	$	29.2