Discontinued Operations

9 Months Ended

Feb. 29, 2020

Discontinued Operations

Discontinued Operations

Note 2 – Discontinued Operations

During the third quarter of fiscal 2018, we decided to pursue the sale of our Contractor-Owned, Contractor-Operated (“COCO”) business previously included in our Expeditionary Services segment. Due to this strategic shift, the assets, liabilities, and results of operations of our COCO business have been reported as discontinued operations for all periods presented.

During fiscal 2019, we signed an agreement to sell our U.S. Department of Defense (“DoD”) contracts and certain assets of our COCO business. In conjunction with this agreement and other expected asset sales, we recognized an impairment charge in discontinued operations of $74.1 million during the third quarter of fiscal 2019 reflecting the expected net proceeds to be received upon the completion of the sale transactions.

In fiscal 2020, we signed an agreement to sell the remaining operating contract of the COCO business and recognized an impairment charge of $11.8 million in the first quarter of fiscal 2020 related to the disposal of the remaining COCO assets. The sale of the DoD contracts and related assets was completed in the second quarter of fiscal 2020 and the sale of the remaining operating contract was completed in the fourth quarter of fiscal 2020 shortly after government approval.

No amounts for general corporate overhead or interest expense were allocated to discontinued operations during the periods presented. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate to our continuing operations.

Operating results for discontinued operations were comprised of the following:

	Three Months Ended				Nine Months Ended
	February 29/28,				February 29/28,
	2020		2019		2020		2019
Sales	$	6.3	$	26.6	$	40.2	$	68.8
Cost of sales		(6.5)		(31.3)		(44.9)		(79.0)
Asset impairments		—		(74.1)		(11.8)		(74.1)
Selling, general and administrative expenses		(0.1)		(2.7)		(7.3)		(7.5)
Operating loss from discontinued operations		(0.3)		(81.5)		(23.8)		(91.8)
Provision for income taxes (benefit)		—		(16.7)		(4.9)		(19.0)
Loss from discontinued operations	$	(0.3)	$	(64.8)	$	(18.9)	$	(72.8)

The carrying amounts of the major classes of assets and liabilities for our discontinued operations are as follows:

	February 29,		May 31,
	2020		2019
Accounts receivable, net	$	2.3	$	16.2
Inventory, rotable assets, and equipment		—		7.5
Operating lease ROU assets		22.7		—
Other assets		1.3		5.5
Assets of discontinued operations	$	26.3	$	29.2
Accounts payable and accrued liabilities	$	17.7	$	29.2
Operating lease liabilities		22.7		—
Liabilities of discontinued operations	$	40.4	$	29.2