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Fair Value Measurements (Tables)
 12 Months Ended
May 31, 2016
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

At May 31, 2016, 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)

    $   -       $ 21,790       $ -       $ 21,790   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total assets

    $ -       $ 21,790       $ -       $ 21,790   
  

 

 

     

 

 

     

 

 

     

 

 

  

Liabilities

            

Derivative contracts (1)

    $ -       $ 2,013       $ -       $ 2,013   

Contingent consideration obligations (2)

      -         -         4,519         4,519   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total liabilities

    $ -       $ 2,013       $ 4,519       $ 6,532   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

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 obligations (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 P – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments.

 

(2)

The fair value of the contingent consideration obligations is determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired businesses. The fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements.
Assets Measured at Fair Value on Non-recurring Basis

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, the Company determined that indicators of impairment were present with regard to intangible assets related to our CNG fuel systems joint venture, dHybrid. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. 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.