Note 2:

Airedale Facility Fire

On September 6, 2013, a fire caused significant destruction to the Company’s Airedale manufacturing facility and offices in Rawdon (Leeds), United Kingdom. The Company reports Airedale’s financial results within the Building HVAC segment (previously known as Commercial Products). There were no injuries caused by the fire. The Rawdon facility, which was leased, was used to manufacture cooling products and solutions for a variety of applications, including data centers, clean rooms, retail, leisure and process cooling. The fire caused a temporary manufacturing suspension at the Rawdon site; however, the Company transferred its operations to temporary facilities and is in the process of rebuilding the leased facility. The Company expects to complete reconstruction and return its operations to the Rawdon site in late fiscal 2016.

The Company maintains insurance coverage for damage to the leased facility, equipment, inventory, other assets, business interruption and lost profits, and recovery-related expenses caused by the fire. The Company believes that reimbursement from its insurance provider is probable for substantially all losses and costs directly attributable to the fire. During fiscal 2015, the Company recorded $4.6 million of recoveries from business interruption insurance relating to fiscal 2015 and 2014 lost profits within SG&A expenses. Since the date of the fire, the Company has received cumulative cash proceeds of $62.7 million from its insurance provider for covered losses. In addition, the Company has written-off inventory of $4.7 million and equipment with a net book value of $1.4 million and incurred costs directly attributable to the fire totaling $22.0 million. The Company has recorded these losses and costs, which totaled $28.1 million, in the same statement of operations line as the related insurance recovery.

The terms of the Rawdon lease agreement obligate the Company to rebuild the damaged facility. Through March 31, 2015, the Company has capitalized reconstruction costs of $21.2 million, and has recorded this asset on the consolidated balance sheet within other current assets. The Company currently estimates costs of reconstruction will total $48.0 million; accordingly, we recorded a $48.0 million other current liability as of March 31, 2015. As of March 31, 2015, we recorded an $18.0 million receivable from the Company’s insurance provider within other current assets, which represented covered losses to date in excess of cumulative cash proceeds received. As of March 31, 2014, the liability to rebuild the facility was $45.0 million ($37.0 million within other current liabilities and $8.0 million within other noncurrent liabilities), and the receivable from the Company’s insurance provider was $25.4 million ($18.4 million within other current assets and $7.0 million within other noncurrent assets).