Discontinued Operations

6 Months Ended

Nov. 30, 2015

Discontinued operations:

Discontinued Operations

Note 2 — Discontinued Operations

On March 26, 2015, we completed the sale of our Telair Cargo Group to TransDigm, Inc.  The Telair Cargo Group was comprised of Telair International, Telair US, and Nordisk Aviation Products.  Cash received at closing in the fourth quarter of fiscal 2015 before fees and expenses was $705 million.  The sale also allowed for contingent consideration of up to $35 million based on the occurrence of certain post-closing events related to the A400M cargo system.  We recognized a pre-tax gain on the sale (net of transaction expenses and fees) of $198.6 million in the fourth quarter of fiscal 2015.

In the first quarter of fiscal 2016, we recognized a gain of $27.7 million net of expenses representing the resolution of the contingent consideration related to the A400M cargo system.

During fiscal 2015, we also announced our intention to sell our Precision Systems Manufacturing (“PSM”) business comprised of our metal and composite machined and fabricated parts manufacturing operations.  We recognized impairment charges of $57.5 million during fiscal 2015 to reduce the carrying value of the PSM business’s net assets to their expected value at the time of sale.

Telair Cargo Group and PSM are reported as discontinued operations in the Condensed Consolidated Statements of Income for all periods presented.  Interest expense allocated to discontinued operations was $0 million and $2.7 million during the three months ended November 30, 2015 and 2014, respectively, and $0 million and $5.6 million during the six months ended November 30, 2015 and 2014, respectively.  No amounts for general corporate overhead were allocated to discontinued operations.

Liabilities of discontinued operations of $4.5 million and $5.4 million at November 30, 2015 and May 31, 2015, respectively, were classified as Accrued Liabilities on the Condensed Consolidated Balance Sheet.  Operating income (loss) from discontinued operations was comprised of the following:

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2015			2014			2015			2014
Sales	$	10.3		$	86.7		$	21.7		$	160.8
Cost of sales	(12.3		)	(75.4		)	(27.1		)	(136.6		)
Selling, general and administrative expenses	(1.6		)	(7.0		)	(3.1		)	(13.4		)
Interest expense, net	—			(3.0		)	—			(6.2		)
Operating income (loss) from discontinued operations	$	(3.6	)	$	1.3		$	(8.5	)	$	4.6