Other Non-current Assets

12 Months Ended

May 31, 2022

Other Non-current Assets

Other Non-current Assets

10. Other Non-current Assets

At May 31, 2022 and 2021, other non-current assets consisted of the following:

	May 31,
	2022		2021
Contract assets	$	22.5	$	21.6
License fees		22.2		25.0
Investments in joint ventures		20.0		18.3
Assets under deferred compensation plan		12.4		12.6
Pension assets		9.8		10.4
Other		10.9		10.9
	$	97.8	$	98.8

Investments in Aircraft Joint Ventures

Under the terms of servicing agreements with certain of our aircraft joint ventures, we provide administrative services and technical advisory services, including aircraft evaluations, oversight and logistical support of the maintenance process and records management.  We also provide evaluation and inspection services prior to the purchase of an aircraft and remarketing services with respect to the divestiture of aircraft by the joint ventures.  During fiscal 2022, 2021, and 2020, we were paid $1.1 million, $1.0 million, and $1.6 million, respectively, for such services.

In the fourth quarter of fiscal 2022, we acquired an aircraft and two engines from one of our aircraft joint ventures for $16.8 million, net of $0.2 million in remarketing fees earned on the purchase, and then sold the assets for $17.0 million.

Investment in Indian Joint Venture

Our investments in joint ventures include $11.7 million for our 40% ownership interest in a joint venture in India to develop and operate an airframe maintenance facility.  The facility received certain regulatory approvals and commenced airframe maintenance operations in the second quarter of fiscal 2022.

The investment balance as of May 31, 2022 includes $9.0 million related to the guarantee liability recognized in conjunction with our guarantee of 40% of the Indian joint venture’s debt.  The Indian joint venture is accounted for using the equity method.  In addition, each of the partners in the Indian joint venture has a loan to the joint venture proportionate to its equity ownership.  Our loan to the Indian joint venture under this arrangement was $3.2 million as of May 31, 2022.

We account for our share of the earnings or losses of the Indian joint venture with a reporting lag of two months, as the financial statements of the Indian joint venture are not completed on a basis that is sufficient for us to apply the equity method on a current basis.

Our share of the Indian joint venture’s losses for fiscal 2022, 2021, and 2020 were $1.8 million, $0 million, and $0.1 million, respectively.

Investment in Malaysian Joint Venture

In the fourth quarter of fiscal 2020, we made the decision to exit our joint venture which operates a landing gear wheel and brake repair and overhaul facility in Malaysia.  In conjunction with the decision to exit the joint venture, we recognized an impairment charge of $1.9 million reflecting the anticipated net proceeds from our investment. During fiscal 2022, we decided to pursue a shutdown of the joint venture and recognized additional impairment charges and related shutdown costs of $0.7 million.

License Fees

In June 2011, we entered into a ten-year agreement with Unison Industries (“Unison”) to be the exclusive worldwide aftermarket distributor for Unison’s electrical components, sensors, switches and other systems for aircraft and industrial uses.  In June 2020, we entered into an extension and expansion of our agreement with Unison including a new termination date of December 31, 2031, an initial $25.0 million license fee paid in June 2020 to Unison, and annual license fees at a fixed percentage of our net sales of Unison products.  The June 2020 payment of $25.0 million was capitalized and is being amortized on a straight-line basis over the term of the new agreement. As of May 31, 2022, the unamortized balance of the license is $21.3 million.

Split-Dollar Life Insurance Arrangements

We previously entered into split-dollar life insurance agreements to benefit certain former executives and officers.  Under the terms of the arrangements, we made premium payments on the individuals’ behalf and we retained a collateral interest in the policies generally to the extent of the premiums we previously paid.  As of May 31, 2022, our Consolidated Balance Sheet included $5.5 million in Other non-current assets for cumulative premiums paid and expected to be reimbursed upon termination of the policies.

During the second quarter of fiscal 2021, certain split-dollar life insurance agreements were terminated and we received $12.0 million for reimbursement of both the life insurance premiums we previously paid and a portion of our prior tax payments made on the individuals’ behalf related to their imputed income on the policies.  The reimbursement of the premiums paid of $10.0 million has been classified as cash flow from investing activities with the remainder included in cash flow from operating activities as it represents the reimbursement of a portion of the income taxes previously paid and expensed.  In the second quarter of fiscal 2021, we recognized a benefit of $1.3 million in Selling, general and administrative expenses on the Consolidated Statement of Income for the net recovery of the taxes previously paid on behalf of the individuals.