Acquisition

In July 2012, the Company signed the Original Purchase Agreement with UTC to acquire the Rocketdyne Business from UTC for $550.0 million. On June 10, 2013, the FTC announced that it closed its investigation into the Acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. On June 12, 2013, the Company entered into an Amended and Restated Purchase Agreement with UTC, which amended and restated the Original Purchase Agreement, as amended. On June 14, 2013, the Company completed the Acquisition of substantially all of the Rocketdyne Business pursuant to the Amended and Restated Purchase Agreement.

The aggregate consideration to UTC was $411.0 million which represents the initial purchase price of $550.0 million reduced by $55.0 million relating to the pending future acquisition of UTC’s 50% ownership interest of RD Amross (a joint venture with NPO Energomash of Khimki, Russia which sells RD-180 engines to RD Amross), and the portion of the UTC business that markets and supports the sale of RD-180 engines. The final purchase price was further adjusted for changes in advance payments on contracts and capital expenditures. The components of the purchase price to UTC are as follows (in millions):



Purchase Price	$	495.0
Advance payments on contracts adjustment	(55.7		)
Capital expenditures adjustment	(28.3		)
Cash payment to UTC	$	411.0

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions):



Current assets	$	105.0
Property, plant and equipment, net	203.8
Other non-current assets	4.2
Total tangible assets acquired	313.0
Intangible assets acquired	128.3
Deferred income taxes	12.9
Total assets acquired	454.2
Liabilities assumed, current	(105.5		)
Liabilities assumed, non-current	(7.2		)
Total identifiable net assets acquired	341.5
Goodwill (Cash payment less total identifiable net assets acquired)	$	69.5

The purchase price allocation resulted in the recognition of $69.5 million in goodwill, all of which is deductible for tax purposes and included within the Company’s Aerospace and Defense segment. Goodwill recognized from the Acquisition primarily relates to the expected contributions of the Rocketdyne Business to the Company’s overall corporate strategy.

The Company has a $7.3 million and $12.0 million indemnification receivable from and payable to UTC, respectively, as of August 31, 2014. Pursuant to the terms of the Amended and Restated Purchase Agreement, the Company is indemnified for certain matters.

The unaudited pro forma information for the periods set forth below gives effect to the Acquisition as if it had occurred at the beginning of fiscal 2013. These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of the Rocketdyne Business to reflect depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied as at the beginning of fiscal 2013, together with the tax effects, as applicable. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the Acquisition been consummated as of that time or that may result in the future. The pro forma information for the third quarter and first nine months of fiscal 2013 is presented below:



	Three months ended		Nine months ended
	August 31, 2013		August 31, 2013
	(In millions, except per share amounts)
Net sales:
As reported	$	367.5	$	897.8
Pro forma	$	367.5	$	1,277.4
Net income:
As reported	$	197.4	$	171.6
Pro forma	$	13.2	$	26.7
Basic income per share
As reported	$	3.25	$	2.83
Pro forma	$	0.22	$	0.44
Diluted income per share
As reported	$	2.39	$	2.13
Pro forma	$	0.18	$	0.39