Fair Value (Tables)

3 Months Ended

Aug. 31, 2015

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

At August 31, 2015, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

(in thousands)	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Totals
Assets
Derivative contracts (1)	$	-	$	11	$	-	$	11
Total assets	$	-	$	11	$	-	$	11
Liabilities
Derivative contracts (1)	$	-	$	22,112	$	-	$	22,112
Contingent consideration obligations (2)		-		-		3,979		3,979
Total liabilities	$	-	$	22,112	$	3,979	$	26,091

At May 31, 2015, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

(in thousands)	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Totals
Assets
Derivative contracts (1)	$	-	$	171	$	-	$	171
Total assets	$	-	$	171	$	-	$	171
Liabilities
Derivative contracts (1)	$	-	$	22,131	$	-	$	22,131
Contingent consideration obligation (2)		-		-		3,979		3,979
Total liabilities	$	-	$	22,131	$	3,979	$	26,110

(1) The fair value of our derivative contracts is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note N – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments.

(2) The fair value of the contingent consideration obligation is determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired business. The fair value measurement was based on Level 3 inputs not observable in the market.

Assets Measured at Fair Value on Non-recurring Basis

At August 31, 2015, our financial assets and liabilities measured at fair value on a non-recurring basis were as follows:

(in thousands)	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Totals
Assets
Long-lived assets held and used (1)	$	-	$	1,059	$	-	$	1,059
Total assets	$	-	$	1,059	$	-	$	1,059

(1) During the first quarter of fiscal 2016, management reviewed certain long-lived assets of its Engineered Cabs facility in Florence, South Carolina, for impairment. In accordance with the applicable accounting guidance, long-lived assets with a carrying value of $4,059,000 were written down to their estimated fair value of $1,059,000 resulting in an impairment charge of $3,000,000 during the three months ended August 31, 2015. Comparable market transactions were used to measure fair value. Refer to “NOTE C – Impairment of Long-Lived Assets” for additional information.

At May 31, 2015, our assets measured at fair value on a non-recurring basis were categorized as follows:

(in thousands)	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Totals
Assets
Long-lived assets held and used (1)	$	-	$	-	$	12,403	$	12,403
Total assets	$	-	$	-	$	12,403	$	12,403

(1) During the fourth quarter of fiscal 2015, management reviewed certain intangible assets related to our CNG fuel systems joint venture, dHybrid, for impairment. In accordance with the applicable accounting guidance, the intangible assets were written down to their fair value of $600,000, resulting in an impairment charge of $2,344,000. The key assumptions that drove the fair value calculation were projected cash flows and the discount rate.